The effect of digital transformation capability on FinTech adoption: The mediating role of data analytics capability

Digital technologies and their rapid evolution have greatly impacted the financial sector, thus making digital transformation increasingly more important strategically paired with analytical capacities to foster FinTech based financial innovation. This study explores the associations between digital transformation capability, data analytics capability and FinTech adoption in financial institutions. In particular, the study investigates the impacts of digital transformation capability on data analytics capability, data analytics capability on FinTech adoption and examines the mediating role or effect of Data Analytics Capability in the influence between Digital Transformation Capability in relation to FinTech Adoption. It was a quantitative study with a cross-section survey design. A structured questionnaire was completed by employees and managers working in financial institutions and FinTech-related sectors. The study used Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze the proposed research model through Smart-PLS-4 software. The results show that digital transformation capability significantly and positively affects data analytics capability, and in turn, data analytics capability is a significant positive driver of FinTech Adoption. Additionally, the findings indicated that data analytics capability mediated the association between digital transformation capability and FinTech adoption. This study expands the literature on digital transformation and financial innovation by combining organizational digital capabilities with different perspectives of FinTech adoption in a single conceptual framework. The results also have some valuable implications for practitioners to facilitate greater digital competitiveness, harness better analytical approaches and make FinTech implementation strategies more effective.