Harnessing FinTech for Financial Inclusion: Analysis of the influence of system scalability, online authentication, and products substitutability

Abstract

This study looks at the evolution of FinTech from a disruptive force to acomplementary element within the financial landscape. Drawing on disruptiveinnovation theory and financial intermediation theory, this study takes a holisticapproach to uncover the mechanisms driving this change. Data was collectedusing a structured questionnaire distributed to 162 IT employees of financialinstitutions in Tanzania. The data was analyzed using structural equationmodeling with Smart PLS. The results show the positive influence of thescalability of FinTech systems and online authentication on financial inclusionand emphasize their central role in expanding access to financial services. Theeffectiveness of online authentication in promoting financial inclusion isparticularly noteworthy. However, the results show that product substitutabilityhas a negligible influence on financial inclusion, pointing to the need for astrategic reorientation of resource allocation. These findings provide industrypractitioners with valuable strategies to navigate the complex intersection ofFinTech and traditional banking. This study contributes to the theoreticaldiscourse by presenting a unique model that integrates disruptive innovationtheory and financial intermediation theory. It argues for concerted efforts to useFinTech as a catalyst for promoting financial inclusion and draws attention toits potential as a powerful enabler for inclusive financial systems. Keywords: Financial inclusion; financial technology; FinTech; Disruptive Innovation;Financial Intermediation.