User Innovativeness and Fintech Adoption in Indonesia

Abstract

The integration of the financial industry and financial technology (Fintech) plays a pivotal role in increasing financial services reach and inclusion for the large unbanked population in Indonesia. Fintech adoption optimization expands the financial access to formal financial institutions, especially to vulnerable groups such as the unbanked population who predominantly reside in rural areas far from formal financial institutions. Fintech is viewed as a game changer to bring finance to the unreached communities via information technology and digital financial landscape. In this causal research, data collection was done via online questionnaires to 485 Fintech users between December 2020 and April 2021. Data analysis and path modelling was performed using smartPLS 3.0 software. Result shows user innovativeness as a significant predictor, directly and indirectly affecting the adoption of Fintech in Indonesia, while user attitude found the most important factor towards Fintech adoption. Financial literacy is the least important variable to predict Fintech adoption, contrary to popular belief. This indicates that Fintech usage requires less financial literacy and is potential to reach unbanked population and those with low financial literacy. To make Fintech more inclusive, the government needs to accelerate improving Information and Communications Technology (ICT) infrastructure such as widening mobile broadband penetration and soft infrastructure by encouraging Fintech startup, allowing regulatory sandbox for startups, and driving financial institutions to innovate through Fintech to bring financial services to unbanked population.

Fintech and Financial Health in Vietnam during the COVID-19 Pandemic: In-Depth Descriptive Analysis

“…The perception that fintech services provide satisfaction when conducting financial transactions motivates fintech service users to adopt financial technologies. Recent studies by Rahman et al (2021) and Setiawan et al (2021) agree similarly that user attitude impacts financial technology adoption positively.…”

“…Personal innovativeness to new technologies is essential in improving experiences and creativity, including technology adoption. A recent study by Twum et al (2021) and Setiawan et al (2021) also found that user innovativeness influences fintech adoption both directly and indirectly.…”

Effect of Digital and Financial Awareness of Household Womens on the Use of Fin-Tech in India: Observing the Relation with (Utaut) Model

“…This postulate has been supported by Khan, K. A. et al [10] that generations and sex have the key impact on the rate of technological adoption. On the other side previous studies e.g., Laywilla et al [8] highlighted the Unified Theory of Acceptance and use of technology (UTAUT) as the source to use Fin-Tech applications. Similar has been indicated by Hill, Binni, and Huang et al [4] .…”

“…Therefore, there is a need to explore the relationship between financial literacy and use of financial technology. However, previous studies also indicated that adoption of Fin-Tech was actually caused due to the technological orientation, Setiawan, B. et al [8] . Therefore, the two-fold purpose of this study is also to explore the base of relationship that either it is based on financial literacy or based on technological orientation.…”

“…There are several studies which relate theories like Technology Acceptance Model (TAM), United Theory of Acceptance and use of technology (UTAUT), Technological Readiness etc. with the adoption of Fin-Tech, Setiawan, B. et al [8] . However, for adoption of Fin-Tech there is also a need of financial literacy, as the financial literacy is the prime tool which make user comfortable with innovative products, Morgan, P. J. et al [6] .…”