Survival determinants of Fintech firms in Malaysia-moderating role of Fintech experience

Abstract

Purpose

Financial technology (Fintech) has become a prominent research area due to its transformative impact on the economy and consumers' lives. Fintech refers to companies that leverage advanced and innovative technologies to deliver financial services. This research examined the factors influencing the survivability of Fintech firms in Malaysia, focusing on three categories of Fintech characteristics: industryspecific, firmspecific, and Fintech specific. Industry specific characteristics included the independent variables of pressure intensity and regulatory support. Firm-specific characteristics encompassed variables such as firm size, size of the management team, and internationalization scope. Fintech, IT, and business process management capabilities represented Fintech specific characteristics. Additionally, Fintech experience was examined as a moderating factor between Fintech capabilities and the survivability of Fintech firms.

Design/methodology/approach

A quantitative approach was employed using a questionnaire survey method to gather data. The study's population consisted of 233 Fintech companies, selected from the Fintech industry in Malaysia as the unit of analysis. Stratified random sampling was utilized to select 187 companies from the population. The questionnaire was distributed to 187 Fintech companies, resulting in 102 responses. Data analysis was conducted using Statistical Package for Social Sciences (SPSS) version 25 and SmartPLS version 4. The study's hypotheses were tested using SmartPLS version 4 as it meets the measurement and complexity criteria of the study's data scale.

Findings

The results showed that regulatory support, Fintech capabilities, IT capabilities, and business process management capabilities significantly affect the survivability of Fintech firms. Fintech experience moderates the relationship between Fintech capabilities and firm survivability. However, pressure intensity, firm size, management team size, internationalization scope, and Fintech capabilities do not significantly influence Fintech firms' survivability.

Originality

This study offers several important implications. First, it addresses gaps in the existing literature and provides valuable insights to enhance the survivability of Fintech firms in Malaysia. Additionally, the findings may benefit policymakers seeking to strengthen support for the Fintech sector.