The mediating effect of transformational leadership on emerging technologies adoption within the financial services sector: digital maturity model approach

Rapid technological advances are escalating the need for organisations in the financial services sector to adopt emerging technologies. Leadership, particularly transformational leadership (TL), has been identified as a significant factor in the adoption of technology and in driving digital maturity (DM). Despite increasing scholarly attention to DM and emerging technology adoption (ETA), little is understood about the mediating effect of TL on this linkage, considering the overall effect, and that at different stages of digital maturity. The study involved 200 respondents from organisations in the financial services sector in South Africa, who evaluated the overall and stage-wise mediating effect of TL on the DM-ETA relationship. The results were analysed using Bayesian and Maximum Likelihood (ML) structural equation modelling (SEM) techniques. The results are consistent with TL partially mediating the DM-ETA relationship, with an indirect effect accounting for approximately 6.5% of the total effect. Vision setting and communication emerged as the most consistent TL trait across maturity stages. The study offers stage-specific insights into how TL traits shift across the digital maturity continuum, providing a basis for financial services organisations to align leadership development with digital transformation strategy.