Assessing the diffusion of FinTech innovation in financial industry: using the rough MCDM model
Abstract
We develop a conceptual structure to explore how financial technology (FinTech) innovation is being implemented to deal with vague, inconsistent and ambiguous knowledge in actual world. The structure of this study is built upon the technology, organization, environment (TOE) context, which one uses the concept of multi-criteria estimation to measure the significance of FinTech innovation. We develop an integrated MCDM (multiple criteria decision-making) model through rough set theory help administrators obtain a strategic influence relation map for enhancing performance approaching towards the aspiration value. This model involves three steps: primary, we apply this rough number to define group views which reflect upon experts’ real experiences; second, we use the rough DEMATEL-based ANP-(RDANP) to acquire the rough influential weights and rough influential network relationship map (RINRM) based on this TOE structure and its corresponding attributes; finally, we utilize the rough modified VIKOR with the influence to analyze the gap between the performance value and the aspirated level. The empirical case was originated from financial industry in Taiwan. According to the weighting results the expected benefits, technology integration, and competitive pressure were the most important criteria. Our results also illustrate how FinTech innovation can be used for promoting financial services.
Keyword : financial technology (FinTech) innovation, technology, organization, environment (TOE), rough MCDM (multiple criteria decision-making), rough influential network relationship map (RINRM)
How to Cite
Chang, H.-H., Lu, M.-T., Huang, L.-H., Ling, H. F., & Yen, Y.-C. (2024). Assessing the diffusion of FinTech innovation in financial industry: using the rough MCDM model. Technological and Economic Development of Economy, 30(1), 261–286. https://doi.org/10.3846/tede.2024.20260
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Lu, M. T., Lin, S. W., & Tzeng, G. H. (2013). Improving RFID adoption in Taiwan’s healthcare industry based on a DEMATEL technique with a hybrid MCDM model. Decision Support Systems, 56, 259–269. https://doi.org/10.1016/j.dss.2013.06.006
Lu, M. T., Tsai, J. F., Shen, S. P., Lin, M. H., & Hu, Y. C. (2020). Estimating sustainable development performance in the electrical wire and cable industry: Applying the integrated fuzzy MADM approach. Journal of Cleaner Production, 277, Article 122440. https://doi.org/10.1016/j.jclepro.2020.122440
Lu, M. T., Chang, S. C., & Huang, L. H. (2022). Using the sustainability-balanced scorecard for assessing sustainability issues of the green energy companies. Technological and Economic Development of Economy, 28(2), 483–499. https://doi.org/10.1016/j.ijinfomgt.2020.102096
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Montiel, I., Christmann, P., & Zink, T. (2019). The effect of sustainability standard uncertainty on certification decisions of firms in emerging economies. Journal of Business Ethics, 154(3), 667–681. https://doi.org/10.1007/s10551-016-3350-0
Muthukannan, P., Tan, B., Gozman, D., & Johnson, L. (2020). The emergence of a Fintech ecosystem: A case study of the Vizag Fintech Valley in India. Information & Management, 57(8), Article 103385. https://doi.org/10.1016/j.im.2020.103385
Nam, D., Lee, J., & Lee, H. (2019). Business analytics adoption process: An innovation diffusion perspective. International Journal of Information Management, 49, 411–423. https://doi.org/10.1016/j.ijinfomgt.2019.07.017
Oliveira, T., Martins, R., Sarker, S., Thomas, M., & Popovič, A. (2019). Understanding SaaS adoption: The moderating impact of the environment context. International Journal of Information Management, 49, 1–12. https://doi.org/10.1016/j.ijinfomgt.2019.02.009
Pamucar, D., Chatterjee, K., & Zavadskas, E. K. (2019). Assessment of third-party logistics provider using multi-criteria decision-making approach based on interval rough numbers. Computers & Industrial Engineering, 127, 383–407. https://doi.org/10.1016/j.cie.2018.10.023
Porter, M., & Millar, V. (1985). How information gives you firm-level value. Harvard Business Review, 63(4), 149–160.
Riivari, E., & Lämsä, A. M. (2019). Organizational ethical virtues of innovativeness. Journal of Business Ethics, 155(1), 223–240. https://doi.org/10.1007/s10551-017-3486-6
Rogers, E. M. (2003). Diffusion of innovations (5th ed.). Free Press.
Schilling, M. A. (2020). Strategic management of technological innovation (6th ed.). McGraw-Hill.
Song, W., Xu, Z., & Liu, H. C. (2017). Developing sustainable supplier selection criteria for solar air-conditioner manufacturer: An integrated approach. Renewable and Sustainable Energy Reviews, 79, 1461–1471. https://doi.org/10.1016/j.rser.2017.05.081
Sun, S., Cegielski, C. G., Jia, L., & Hall, D. J. (2018). Understanding the Factors Affecting the Organizational Adoption of Big Data. Journal of Computer Information Systems, 58(3), 193–203. https://doi.org/10.1080/08874417.2016.1222891
Swanson, E. B., & Ramiller, N. C., (2004). Innovating mindfully with information technology. MIS Quarterly, 28(4), 553–583. https://doi.org/10.2307/25148655
Thompson, V. A. (1965). Bureaucracy and innovation. Bureaucracy and Innovation, 10(1), 1–20. https://doi.org/10.2307/2391646
Tomasi, S., Schuff, D., & Turetken, O. (2018). Understanding novelty: How task structure and tool familiarity moderate performance. Behaviour & Information Technology, 37(4), 406–418. https://doi.org/10.1080/0144929X.2018.1441325
Tornatzky, L. G., & Fleischer, M. (1990). Processes of technological innovation. Lexington Books.
Zavolokina, L., Dolata, M., & Schwabe, G. (2016). The Fintech phenomenon: Antecedents of financial innovation perceived by the popular press. Financial Innovation, 2, Article 16. https://doi.org/10.1186/s40854-016-0036-7
Zhao, J. S., Li, X. H., Yu, C. H., Chen, S., & Lee, C. C. (2022). Riding the fintech innovation wave: FinTech, patents and bank performance. Journal of International Money and Finance, 122, Article 102552. https://doi.org/10.1016/j.jimonfin.2021.102552
Zhu, K., Kraemer, K. L., & Xu, S. (2003). E-business adoption by European firms: A cross-country assessment of the facilitators and inhibitors. European Journal of Information Systems, 12(4), 251–268. https://doi.org/10.1057/palgrave.ejis.3000475
Zhu, K., Kraemer, K. L., & Xu, S. (2006). The process of innovation assimilation by firms in different countries: A technology diffusion perspective on e-business. Management Science. 52(10), 1557–1576. https://doi.org/10.1287/mnsc.1050.0487
Zmud, R. (1982). Diffusion of modern software practices: Influence of centralization and formalization. Management Science, 28(12), 1421–1431. https://doi.org/10.1287/mnsc.28.12.1421
Acar, A. Z., & Özşahin, M. (2018). The relationship among strategic orientations, organizational innovativeness, and business performance. International Journal of Information Management, 22(1), Article 1850009. https://doi.org/10.1142/S1363919618500093
BenYishay, A., Jones, M., Kondylis, F., & Mobarak, A. M. (2020). Gender gaps in technology diffusion. Journal of Development Economics, 143, Article 102380. https://doi.org/10.1016/j.jdeveco.2019.102380
Brooks, G., Kinsley, K., & Owens, T. (2014). 3D printing as a consumer technology business model. International Journal of Information Management, 18(4), 271–280. https://doi.org/10.19030/ijmis.v18i4.8819
Brous, P., Janssen, M., & Herder, P. (2020). The dual effects of the Internet of Things (IoT): A systematic review of the benefits and risks of IoT adoption by organizations. International Journal of Information Management, 51, Article 101952. https://doi.org/10.1016/j.ijinfomgt.2019.05.008
Chari, V. V., Dovis, A., & Kehoe, P. J. (2020). On the optimality of financial repression. Journal of Political Economy, 128(2), 710–739. https://doi.org/10.1086/704575
Coffie, C. P. K., Hongjiang, Z., Mensah, I. A., Kiconco, R., & Simon, A. E. O. (2021). Determinants of FinTech payment services diffusion by SMEs in Sub-Saharan Africa: Evidence from Ghana. Information Technology for Development, 27(3), 539–560. https://doi.org/10.1080/02681102.2020.1840324
Cruz-García, P., Fernández de Guevara, J., & Maudos, J. (2021). Bank competition and multimarket contact intensity. Journal of International Money and Finance, 113, Article 102338. https://doi.org/10.1016/j.jimonfin.2020.102338
Cruz-Jesus, F., Pinheiro, A., & Oliveira, T. (2019). Understanding CRM adoption stages: Empirical analysis building on the TOE framework. Computers in Industry, 109, 1–13. https://doi.org/10.1016/j.compind.2019.03.007
Fichman, R. G., & Kemerer, C. (1999). The illusory diffusion of innovation: An examination of assimilation gaps. Information Systems Research, 10(3), 255–275. https://doi.org/10.1287/isre.10.3.255
Fu, J., & Mishra, M. (2022). Fintech in the time of COVID−19: Technological adoption during crises. Journal of Financial Intermediation, 50, Article 100945. https://doi.org/10.1016/j.jfi.2021.100945
Gai, K., Qiu, M., & Sun, X. (2018). A survey on FinTech. Journal of Network and Computer Applications, 103, 262–273. https://doi.org/10.1016/j.jnca.2017.10.011
Grennan, J., & Michaely, R. (2021). FinTechs and the market for financial analysis. Journal of Financial and Quantitative Analysis, 56(6), 1877–1907. https://doi.org/10.1017/S0022109020000721
Goldstein, I., Jiang, W., & Karolyi, G. A. (2019). To fintech and beyond. The Review of Financial Studies, 32(5), 1647–1661. https://doi.org/10.1093/rfs/hhz025
Hasan, R., Hassan, M. K., & Aliyu, S. (2020). FinTech and Islamic finance: Literature review and research agenda. International Journal of Islamic Economics and Finance, 3(1), 75–94. https://doi.org/10.18196/ijief.2122
Henningsson, S., & Kettinger, W. J. (2016). Understanding information systems integration deficiencies in mergers and acquisitions: A configurational perspective. Journal of Management Information Systems, 33(4), 942–977. https://doi.org/10.1080/07421222.2016.1267516
Knott, A. M., & Vieregger, C. (2020). Reconciling the firm size and innovation puzzle. Organization Science, 31(2), 477–488. https://doi.org/10.1287/orsc.2019.1310
Lee, I., & Shin, Y. J. (2018). FinTech: ecosystem, business models, investment decisions, and challenges. Business Horizons, 61(1), 35–46. https://doi.org/10.1016/j.bushor.2017.09.003
Lee, C. C., Li, X., Yu, C. H.,& Zhao, J. (2021). Does fintech innovation improve bank efficiency? Evidence from China’s banking industry. International Review of Economics & Finance, 74, 468–483. https://doi.org/10.1016/j.iref.2021.03.009
Liou, J. J. H., Kaklauskas, A., Lu, M. T., & Chuang, Y. C. (2019). Improving strategic orientations for promoting hotel services using an integrated rough MAGDM model. Technological and Economic Development of Economy, 25(2), 188–218. https://doi.org/10.3846/tede.2019.8419
Liu, J., Li, X., & Wang, S., (2020). What have we learnt from 10 years of fintech research? a scientometric analysis. Technological Forecasting and Social Change, 155, Article 120022. https://doi.org/10.1016/j.techfore.2020.120022
Lu, M. T., Hu, S. K., Huang, L. H., & Tzeng, G. H. (2015). Evaluating the implementation of business-to-business m-commerce by SMEs based on a new hybrid MADM model. Management Decision, 53(2), 290–317. https://doi.org/10.1108/MD-01-2014-0012
Lu, M. T., Lin, S. W., & Tzeng, G. H. (2013). Improving RFID adoption in Taiwan’s healthcare industry based on a DEMATEL technique with a hybrid MCDM model. Decision Support Systems, 56, 259–269. https://doi.org/10.1016/j.dss.2013.06.006
Lu, M. T., Tsai, J. F., Shen, S. P., Lin, M. H., & Hu, Y. C. (2020). Estimating sustainable development performance in the electrical wire and cable industry: Applying the integrated fuzzy MADM approach. Journal of Cleaner Production, 277, Article 122440. https://doi.org/10.1016/j.jclepro.2020.122440
Lu, M. T., Chang, S. C., & Huang, L. H. (2022). Using the sustainability-balanced scorecard for assessing sustainability issues of the green energy companies. Technological and Economic Development of Economy, 28(2), 483–499. https://doi.org/10.1016/j.ijinfomgt.2020.102096
Lu, M. T., Huang, J. C., & Wang, M. H. (2023). Evaluating the mobile learning quality for promoting the user needs in Taiwanese higher education during COVID-19. International Journal of Information Technology & Decision Making. https://doi.org/10.1142/S0219622023500232
Makina, D. (2019). The potential of FinTech in enabling financial inclusion. In D. Makina (Ed.), Extending financial inclusion in Africa (pp. 299–318). Academic Press. https://doi.org/10.1016/B978-0-12-814164-9.00014-1
Montiel, I., Christmann, P., & Zink, T. (2019). The effect of sustainability standard uncertainty on certification decisions of firms in emerging economies. Journal of Business Ethics, 154(3), 667–681. https://doi.org/10.1007/s10551-016-3350-0
Muthukannan, P., Tan, B., Gozman, D., & Johnson, L. (2020). The emergence of a Fintech ecosystem: A case study of the Vizag Fintech Valley in India. Information & Management, 57(8), Article 103385. https://doi.org/10.1016/j.im.2020.103385
Nam, D., Lee, J., & Lee, H. (2019). Business analytics adoption process: An innovation diffusion perspective. International Journal of Information Management, 49, 411–423. https://doi.org/10.1016/j.ijinfomgt.2019.07.017
Oliveira, T., Martins, R., Sarker, S., Thomas, M., & Popovič, A. (2019). Understanding SaaS adoption: The moderating impact of the environment context. International Journal of Information Management, 49, 1–12. https://doi.org/10.1016/j.ijinfomgt.2019.02.009
Pamucar, D., Chatterjee, K., & Zavadskas, E. K. (2019). Assessment of third-party logistics provider using multi-criteria decision-making approach based on interval rough numbers. Computers & Industrial Engineering, 127, 383–407. https://doi.org/10.1016/j.cie.2018.10.023
Porter, M., & Millar, V. (1985). How information gives you firm-level value. Harvard Business Review, 63(4), 149–160.
Riivari, E., & Lämsä, A. M. (2019). Organizational ethical virtues of innovativeness. Journal of Business Ethics, 155(1), 223–240. https://doi.org/10.1007/s10551-017-3486-6
Rogers, E. M. (2003). Diffusion of innovations (5th ed.). Free Press.
Schilling, M. A. (2020). Strategic management of technological innovation (6th ed.). McGraw-Hill.
Song, W., Xu, Z., & Liu, H. C. (2017). Developing sustainable supplier selection criteria for solar air-conditioner manufacturer: An integrated approach. Renewable and Sustainable Energy Reviews, 79, 1461–1471. https://doi.org/10.1016/j.rser.2017.05.081
Sun, S., Cegielski, C. G., Jia, L., & Hall, D. J. (2018). Understanding the Factors Affecting the Organizational Adoption of Big Data. Journal of Computer Information Systems, 58(3), 193–203. https://doi.org/10.1080/08874417.2016.1222891
Swanson, E. B., & Ramiller, N. C., (2004). Innovating mindfully with information technology. MIS Quarterly, 28(4), 553–583. https://doi.org/10.2307/25148655
Thompson, V. A. (1965). Bureaucracy and innovation. Bureaucracy and Innovation, 10(1), 1–20. https://doi.org/10.2307/2391646
Tomasi, S., Schuff, D., & Turetken, O. (2018). Understanding novelty: How task structure and tool familiarity moderate performance. Behaviour & Information Technology, 37(4), 406–418. https://doi.org/10.1080/0144929X.2018.1441325
Tornatzky, L. G., & Fleischer, M. (1990). Processes of technological innovation. Lexington Books.
Zavolokina, L., Dolata, M., & Schwabe, G. (2016). The Fintech phenomenon: Antecedents of financial innovation perceived by the popular press. Financial Innovation, 2, Article 16. https://doi.org/10.1186/s40854-016-0036-7
Zhao, J. S., Li, X. H., Yu, C. H., Chen, S., & Lee, C. C. (2022). Riding the fintech innovation wave: FinTech, patents and bank performance. Journal of International Money and Finance, 122, Article 102552. https://doi.org/10.1016/j.jimonfin.2021.102552
Zhu, K., Kraemer, K. L., & Xu, S. (2003). E-business adoption by European firms: A cross-country assessment of the facilitators and inhibitors. European Journal of Information Systems, 12(4), 251–268. https://doi.org/10.1057/palgrave.ejis.3000475
Zhu, K., Kraemer, K. L., & Xu, S. (2006). The process of innovation assimilation by firms in different countries: A technology diffusion perspective on e-business. Management Science. 52(10), 1557–1576. https://doi.org/10.1287/mnsc.1050.0487
Zmud, R. (1982). Diffusion of modern software practices: Influence of centralization and formalization. Management Science, 28(12), 1421–1431. https://doi.org/10.1287/mnsc.28.12.1421