The Impact of Fintech Adoption on Financial Development: A Systematic Literature Review

Abstract

The impact of Fintech adoption is multifaceted and continuously transforming. As Fintech initiatives remain in their early stages, and the financial sector has not yet experienced a radical transformation, there is a need to assess its true impact on the financial sector in advance. This review paper meticulously examined how Fintech adoption is revolutionizing financial sector development, particularly in the domains of access, depth, efficiency, and stability. Due to the evolving nature of this phenomenon, our analysis draws insights from the most recent three years of literature on Fintech adoption and its impact on financial sector development. Utilizing the ROSES methodology, the study has conducted a comprehensive systematic literature review. The research question was formulated using the Population, Intervention, Context and Outcome framework. The research findings present a mixed picture, with all domains exhibiting both significant benefits and challenges, leaving this area still ambiguous, primarily due to the lack of a unified measurement strategy used by previous studies, as well as data and measurement constraints. The study contributes by formulating an index for Fintech adoption and financial development, considering its multidimensional nature and drawing on previous studies to reach a consensus measure. The study also identifies the gaps in the existing literature, paving the way for future research avenues.

Keywords: Financial development, Fintech adoption, financial institution & market, digital disruption, SLR