Sustainability of Fintech Start-ups: Navigating Regulatory Compliance, Funding Challenges, Cybersecurity and Market Dynamics

Purpose: The aim of this article is to present theoretical and empirical findings on the factors that impact the sustainability of fintech start-ups including regulatory costs of compliance, access to funding, investment in cybersecurity, and trust in fintech, and focusing on Bengaluru’s fledgling fintech industry. Methodology: The methodology of this study is mixed methods; literature review and latent semantic analysis (LSA) for the conceptual framework formation. The framework is then empirically examined through a Multi-Group Analysis and Measurement Invariance Assessment in conjunction with partial least squares structural equation modelling (PLS-SEM) using data gathered from 365 fintech stakeholders. Findings: The investments in cybersecurity and the access to funding has a strong and positive influence on the sustainability of fintech, while the compliance costs have a highly significant negative influence. Trust in fintech also plays a role in the impact of investment in cybersecurity on sustainability, highlighting the critical role of a safe space for the generation of trust. Market competition and economic conditions become relevant contextual factors and influence these relationships. Practical implications: Results provide insights for fintech founders, investors, and policymakers regarding improving cybersecurity, access to funding, and balancing compliance requirements; and about trust as a means of connecting security investment to long-term viability. Originality/Value: This study is original because it combines regulatory theory, market-based theory, and innovation theory, and it reveals the key mechanisms of sustainability. It addresses the scant evidence on these dynamics in the context of growing fintech hubs.