Understanding fintech adoption in India: the mediating role of trust and the moderating role of emotional intelligence

Abstract
The fintech phenomenon is growing at a rapid pace, and it is crucial to identify the antecedents and mechanisms that predict customer intentions and behaviors toward adopting these services. Focusing on trust as a key psychological mechanism, this study employs the Extended Trust–Risk–Literacy (ETRL) model to examine the impact of digital literacy and perceived risk on fintech adoption. It also investigates the moderating role of emotional intelligence in the perceived risk–trust relationship. Data were collected from a Sample of 487 active fintech users, recruited using a mix of purposive and snowball sampling in five major metropolitan cities in India. The results based on partial least squares structural equation modeling (PLS-SEM) indicate positive effects of digital literacy on trust and fintech adoption. Perceived risk has a negative effect in the opposite direction. Results further show that trust partially mediates the digital literacy and perceived risk effects on fintech adoption. Importantly, the findings also establish that emotional intelligence acts as a risk buffer by weakening the negative relationship between perceived risk and trust. The two models explained 49.2% of the variance in trust and 52.7% of the variance in fintech adoption. This paper is among the first to incorporate the effects of cognitive capability, risk perception, and emotional regulation in a single empirical model to study fintech adoption. From a practical viewpoint, our results suggest that to enhance fintech adoption, strategies to promote adoption should move beyond technology accessibility and usability and focus on building trust, enhancing digital capability, and reducing perceived risk. From a policy perspective, our results provide further evidence in support of combining digital financial inclusion initiatives with consumer protection initiatives and trust-building initiatives. From a provider’s viewpoint, our results suggest that user education, transparent communication of risk, and emotionally positive service design can foster adoption and continue to foster ongoing adoption of fintech services.