Tech-driven financial inclusion: analyzing the determinants and implications of FinTech adoption for reducing financial exclusion in Indonesia

Purpose A financial technology (FinTech) plays an important role in the micro and macro finance sectors. Massive investment is driving the development of the FinTech industry globally. However, this positive trend has yet to have a significant impact on the Indonesian economy. The level of financial inclusion in Indonesia is still one of the lowest compared to other countries in ASEAN. This study aims to investigate the driving factors of FinTech adoption in Indonesia and their implications in financial inclusion. Design/methodology/approach A structural Equation Modeling-Partial Least Square (SEM-PLS) method was used to statistically test 369 respondent data points. Findings This study reveals that the four latent variables (digital literacy, financial literacy, model acceptance and use of technology) positively and significantly influence the intention to use FinTech payments. Sustainable use has also been proven to positively encourage exploitative and explorative use behaviors by users. In the end, the use of FinTech payments with exploitative and explorative patterns has been proven statistically to increase financial inclusion in Indonesia. Practical implications This study offers important practical implications by emphasizing the need to enhance the functionality and user-centered design of FinTech payment systems to better align with users’ needs while explicitly fostering both exploitative use and explorative use beyond basic transactional functions. In this regard, collaborative initiatives between the Bank Indonesia and The Financial Services Authority (OJK) as well as higher education institutions are essential to strengthen financial literacy and advance financial inclusion. Such collaboration can be operationalized through university-led community engagement and student-driven outreach programs to promote adaptive and sustained use of digital financial services within the formal financial ecosystem. Originality/value This research uniquely investigates the driving factors of FinTech adoption in Indonesia by combining the constructs of technology acceptance and infusion to explain the relationship between FinTech usage and financial inclusion in Indonesia.