Fintech Adoption and Risk Management: the Mediating Role of Regulatory Environment, Technological Infrastructure, and organizational Readiness: Evidence From Dashen Bank
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Date
2025-05-12
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A.A.U
Abstract
In the evolving digital landscape, Financial Technology (FinTech) has emerged as a
transformative force within the banking sector, particularly in enhancing risk management
frameworks. This study investigates the relationship between FinTech adoption and risk
management practices in Ethiopian commercial banks, using Dashen Bank as a case study.
The research examines how regulatory environment, technological infrastructure, and
organizational readiness mediate the impact of FinTech tools such as AI, machine
learning, blockchain, and big data analytics on risk identification, assessment, and
mitigation. A mixed-methods approach was employed, combining quantitative survey data
and qualitative interviews. Structural Equation Modeling (SEM) was used to analyze the
mediating role of institutional factors in FinTech adoption. The results indicate that while
FinTech significantly improves the efficiency and responsiveness of risk management
processes, its integration is highly contingent upon supportive regulatory frameworks,
technological capability, and organizational preparedness. Findings also highlight that
regulatory ambiguity, infrastructural deficits, and skill shortages constrain full-scale
adoption. This study contributes to academic discourse by filling a research gap in
developing economies regarding FinTech’s operational impact on banking risk
management. It offers practical insights for bank managers, policy makers, and technology
developers, advocating for improved collaboration between financial institutions and
regulators. Recommendations include regulatory reforms, investment in digital
infrastructure, capacity building, and promoting a conducive ecosystem for FinTechdriven
innovation in
risk
management.