THE ROLE OF DIGITAL TRANSFORMATION IN FINANCIAL SECTOR : A GLOBAL PERSPECTIVE
DOI: 10.5937/etp2401082V
Keywords:
development, digitalization, economic growth, innovationsAbstract
The financial industry is experiencing a digital
revolution fueled by the fourth industrial revolution. While
digital tools are widely adopted, the specific impacts of
digitalization and innovation on financial markets and citizens
remain under-researched. This study investigates the
relationship between technological progress and innovation
with the development of financial markets, the Human
Development Index, and the Gross Domestic Product per capita.
The core question is how, and to what extent, technological
advancement and innovation influence financial development
and other social and financial performances per capita. The
research employs regression analysis, specifically simple linear
regression, and integrates existing research and theoretical
frameworks to build an inductive approach. Findings indicate
that a one-unit rise in technological progress is linked to a 0.5-
unit increase in the financial development index (p-value < 0.001). These findings suggest that financial intermediaries and
decision-makers in developing countries should consider
altering their business models and adapting to rapid
technological changes to enhance financial development. This
paper provides insights into the connection between progress in
digitization and outcomes in the economy and finance,
emphasizing the importance of adapting to swift technological
changes for sustainable development.
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