Driving sustainable banking performance: the roles of digital transformation, FinTech adoption, and financial inclusion under regulatory environment moderation

Purpose With sustainability becoming a global priority, financial institutions increasingly use FinTech to support sustainable performance within evolving regulatory environments. This study investigates how digital innovation, specifically FinTech Adoption and financial inclusion, is associated with firms' sustainable performance while examining the moderating role of the regulatory environment in shaping these relationships. It also offers insights into how regulatory frameworks can support the use of digital tools to promote a more sustainable financial future. Design/methodology/approach This study employed a survey methodology to collect data from bank employees in Saudi Arabia. From a total of 402 survey responses, 385 were considered valid and used for analysis. The proposed relationships were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). Findings The study revealed that digital transformation was significantly linked to sustainable performance, FinTech Adoption, and financial inclusion. Fintech Adoption was positively related to financial inclusion and sustainable performance. The moderation analysis showed that the regulatory environment strengthens the association between financial inclusion and sustainable performance. However, it does not significantly moderate the relationships between FinTech Adoption and sustainable performance or digital transformation and sustainable performance. Originality/value This study contributes a perspective by applying the Resource-Based View and Technological Innovation Systems frameworks to examine how internal capabilities and regulatory support are associated with sustainable performance. It also addresses a contextual gap by focusing on the Saudi banking sector under Vision 2030 reforms. The findings provide partial support for the moderating role of the regulatory environment, highlighting the complexity of regulatory influence.