Determination of Holistic Fintech Dimensions and Sub-Dimensions Framework

Purpose: Fintech as an emergent industry with innovative and agile nature, has brought about challenges for governors and legal authorities to perform Fintech governance. Therefore, the comprehensive and precise determination of Fintech dimensions is a fundamental requirement for an efficient and effective Fintech governance. Since we lack a research consisting of multi-level holistic dimensions for Fintech, this research aims to investigate current studies on Fintech dimensions and introduce a holistic Fintech dimensions and sub-dimensions framework.

Method: We followed mixed method comprising of qualitative and quantitative methods. In qualitative phase, we used Systematic Literature Review and Content Analysis to collect researches available in well-known databases such as Google Scholar, Science Direct, Research Gate and some others, based on key words of Fintech, Financial Technology, Fintech Governance, Fintech Dimensions and Fintech Sub-dimensions, to gather information about Fintech dimensions in addition to major issues capable of forming new dimensions. So, the initial Fintech dimensions and their correspondent sub-dimensions were extracted and classified. Then we contributed to propose a framework for Fintech dimensions and sub-dimensions. We tried to classify dimensions and sub-dimensions with highest partitioning and minimize or avoid probable overlap. In the quantitative phase, within the framework, the sub-dimensions and dimensions were validated utilizing Fuzzy Delphi and Confirmatory Factor Analysis, respectively. In this regard, for Fuzzy Delphi, we gathered 15 experts’ opinion via standard questionnaire and used Excel for further standard calculations. Also for Confirmatory Factor Analysis, we gathered 220 experts’ opinion using standard questionnaire and followed further calculations in SPSS. The experts were randomly selected from a population of Industrial Management, IT Management, Strategic Management, Financial Management, Accounting, Public Administration, Computer Engineering, Electrical Engineering, Industrial Engineering experts with masters or higher level degrees and at least 5 years of working experience in managerial or manager deputy positions relevant to Fintech industry.

Findings: Based on literature, three proposed dimensions consisted of Business, Technical, Regulation and Supervision each of which has its correspondent sub-dimensions. Business dimension referred to Firms and Business Models, Technical dimension comprised of Technology, Equipment/ Tool, Products/ Services and, Regulation and Supervision discussed Islamic Law, Regulatory and Supervisory. Finally, all three dimensions and eight sub-dimensions were validated by experts and the proposed framework was approved.

Conclusion: Determination of Fintech dimensions and Sub-dimensions is necessary due to the aim of achieving a proper Fintech governance. The validated framework consisting of three dimensions and eight sub-dimensions for Fintech is influential in this regard. This fact can be discussed from various perspectives. First, the literature on Fintech dimensions and sub-dimensions were diverse but not sufficiently rich and holistically categorized. This is because each research looked through the subject from its own lens and provided repetitive classification for Fintech dimensions. Second, technical issues of Fintech were dominant during early years of Fintech advent due to tech-based innovations like progress in data storage and infrastructure, and hence, they comprised a large volume of information on Fintech dimensions. With the introduction of modern governance frameworks such as regulatory governance, the trends of Fintech dimensions moved towards regulatory issues and this attracted a massive attention on regulatory of Fintech as discussed it as a must. Discussions on regulatory of Fintech now form a large number of researches and this satisfied us to dedicate a dimension to this issue of Fintech in addition to other common dimensions i.e. business and technical. Third, the novelty of the proposed framework is approved. The experts approved that the classification of dimensions and their attribution to correspondent proper sub-dimensions, integrated previous researches and proposed a new novel classification for Fintech dimensions. Forth, mentioning Islamic Law separately indicated the importance of Islamic approach to regulation and supervision by governors and made the framework, customizable to Islamic countries as well. Fifth, this framework helps governors and legal authorities to understand and examine Fintech from a holistic approach and clarifies what Fintech is for Fintech industry itself. Having commitment to this framework by both legal authorities and Fintech industry, they will have their mutual rights and responsibility crystal clear. These dimensions and sub-dimensions are internationally compatible with Fintech industry and simultaneously, inclusion of Islamic law and regulation considers the requirements of Islamic countries including Iran to regulate and supervise Fintech.