Assessment of the Impact of External Environment on Fintech Development

Abstract

Purpose – to propose an assessment tool of the environment of FinTech sector. Research methodology – systematic analysis of scientific literature has been carried out to form a methodology for FinTech sector environment assessment, which consists of quantitative methods used for the empirical research of the study as follows: PEST analysis, expert evaluation, determination of indicators’ values, normalization of data, multi-criteria assessment (the Simple Additive Weighting (SAW) method). Findings – the practical application of the developed assessment tool is verified by completing an empirical study on the example of the leading FinTech countries as well as the Baltic States. Recommendations for further Lithuanian FinTech sector development are provided. Research limitations – research is based on an assessment of the significance of external environmental indicators of FinTech sector development on a country level. Due to the large number of indicators and countries, only a fraction of factors and countries were selected for research. Therefore, the object of the research requires a more detailed study in the future. Practical implications – the development of FinTech sector has been growing dramatically in the recent years on a global scale, with some countries leading the way due to a more favourable environment. The results show that the proposed assessment tool for the development of the FinTech sector can be used by policymakers in different countries to identify the external environmental factors to improve in order to create better conditions for the development of the FinTech sector. Originality/Value – a new methodology and tool for FinTech environment assessment is developed by the authors as a contribution to the formation of better environment for FinTech sector development. The developed tool provides an opportunity to study the strong and weak sides of the environment development of the FinTech sector, to compare the good practices of other countries and to get ideas for changes in order to create a more favourable environment for the FinTech development on a country level.

Assessing statistical link between FinTech PEST environment and achievement of SDGs

“…Multi-criteria assessment is done for the assessment of the FinTech PEST environment on a country level. For this step, 15 countries were selected to adopt a new FinTech PEST environment assessment tool (Pauliukevičienė & Stankevičienė, 2021). The composition of this tool is presented in Table 1 and the explanation of all indicators is provided in Appendix A.…”

“…To assess the performance of each selected country in each environment, multi-criteria assessment (Simple Additive Weighting method) was used -every indicator was multiplied by its weight (Pauliukevičienė & Stankevičienė, 2021), and the numbers obtained after multiplication were summed in each environment (Appendix B). To assess the performance of each selected country in the overall PEST environment, the same principle was applied (Table 2).…”

“…and their significance The results of data collection and partial processing for the FinTech PEST environment assessment tool (Pauliukevičienė & Stankevičienė, 2021) adaptation are presented in Appendix B, where country rankings on a global level were expressed as percentages and normalized. To fully adapt the FinTech PEST environment assessment tool to the study and assess the performance of each country in each PEST environment, Multi-Criteria Decision Support Method of Simple Additive Weighting (SAW) was used -every indicator value presented in Appendix B was multiplied by its weight, also presented in Table 1.…”

Assessment of the Impact of Sustainable Development Goals Indicators on the Sustainable Development of Fintech Industry

“…The development of the Fintech industry can be stimulated by creating favorable external environment conditions at the national level (Pauliukevičienė & Stankevičienė, 2021a), but for the sustainable Fintech development, it is important to refine the interaction between the FinTech industry development and SDGs. Recent research has shown that there is a statistical link between the FinTech political, economic, social and technological (PEST) environment and SDG 4 "Quality Education", SDG 8 "Decent Work and Economic Growth", SDG 9 "Industry, Innovation and Infrastructure", SDG 16 "Peace, Justice and Strong Institutions", which suggests that FinTech PEST environment and SDG 4, SDG 8, SDG 9, SDG 16 are dependent (Pauliukevičienė & Stankevičienė, 2021b).…”