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Defeating the Dark Sides of FinTech: A Regression-Based Analysis of Digitalization’s Role in Fostering Consumers’ Financial Inclusion in Central and Eastern Europe

Author

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  • Mirela Clementina Panait

    (Faculty of Economic Sciences, Petroleum-Gas University of Ploiești, 100680 Ploiesti, Romania
    Romanian Academy, Institute of National Economy, 010071 Bucharest, Romania)

  • Simona Andreea Apostu

    (Romanian Academy, Institute of National Economy, 010071 Bucharest, Romania
    Department of Statistics and Econometrics, Bucharest University of Economic Studies, 010552 Bucharest, Romania)

  • Iza Gigauri

    (Department of Business Administration, School of Business and Administrative Studies, The University of Georgia, Tbilisi 0171, Georgia)

  • Maria Giovanna Confetto

    (Department of Political and Communication Sciences, University of Salerno, 84081 Salerno, Italy)

  • Maria Palazzo

    (Faculty Law and Economics, Universitas Mercatorum, 00186 Rome, Italy)

Abstract

Financial technologies metamorphose economies with customer-focused innovation. In this way, financial inclusion is fostered and economic growth is increased. However, risks, trust issues, and ethical concerns stem from the faster advancement of digital technologies and expanding financial innovation. Thus, this paper aims to understand the risks and barriers associated with FinTech and consumer adoption, focussing on the impact of digitalization on financial products/services’ acceptance. The research investigates the impact of digitalization on financial services and the recognition of the role played in the global economy by FinTech. For this reason, the regression analysis was used to explore the influence and correlation of various variables on FinTech in Central and Eastern European (CEE) countries, such as Internet usage, online shopping, paying bills via the Internet, and making and receiving digital payments. The results show differences between three clusters of CEEs in terms of FinTech adoption. While several past studies have explored the advantages of FinTech, few studies have investigated the risks associated with its adoption, trust, and barriers to its usage in different country contexts. The present paper fills the gap by analysing the data on Internet usage, online shopping, paying bills via Internet, and sending or receiving digital payments in CEE countries. The study recommends that FinTech companies share information online not only to present their offerings to users, but also to promote financial education through clear and straightforward communication about the features of their services. This approach can indirectly benefit society by contributing to financial development, inclusion, social stability, and, consequently, sustainable development.

Suggested Citation

  • Mirela Clementina Panait & Simona Andreea Apostu & Iza Gigauri & Maria Giovanna Confetto & Maria Palazzo, 2024. "Defeating the Dark Sides of FinTech: A Regression-Based Analysis of Digitalization’s Role in Fostering Consumers’ Financial Inclusion in Central and Eastern Europe," Risks, MDPI, vol. 12(11), pages 1-18, November.
    • Handle: RePEc:gam:jrisks:v:12:y:2024:i:11:p:178-:d:1518459
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    References listed on IDEAS

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