FinTech-Driven Transformation of Financial Management: Evaluating Digital Innovation, Risk Management, and Strategic Decision-Making

This research explores the impact of digital innovation, risk management, strategic decision-making and firm performance on financial management through the lens of FinTech adoption. Based on the establishment level data from the World Bank Firm Adoption of Technology Survey for India, this study formulates indices of FinTech adoption, digital financial management capability, digital innovation, strategic decision making and financial-risk exposure. Descriptive, correlation, diagnostic and robustness analyses are used in conjunction with weighted least-squares regressions using HC3 robust standard errors. The findings indicate that there is a significant link between the use of FinTech and digital financial-management capability, as well as broadened digital innovation and advanced strategic decision making. Annualised sales growth is also shown to be positively related to the adoption of FinTech, while the direct relationship of operating margin and labour productivity is not statistically significant. Importantly, financial-risk exposure is positively related to adoption of FinTech – specifically credit constraints – suggesting that not all digitalisation leads to lower financial vulnerability. The relationship between strategic capability and labor productivity is positive and that between financial-risk exposure and labor productivity is negative. The results place FinTech within an embedded financial information and decision support infrastructure where organizational value relies on complementary digital capacities and managerial information practices, as well as financial resilience. The study provides empirical evidence at the firm level and is useful for making intelligent decisions and managing finance in the modern companies in India, in an emerging market scenario.