Exploring the Role of Islamic FinTech Innovation Trialability and Compatibility in Enhancing Islamic Financial Inclusion: A Data-driven Approach

Abstract

The promotion of Islamic financial inclusion (IFI) is a challenge for Islamic banking industry in Pakistan. Although, Islamic banks are trying to enhance IFI, however, a satisfactory level is not achieved. Therefore, the objective of this study is to examine the role of trialability and compatibility in enhancing IFI. A questionnaire survey was preferred in this study to collected data from clients of Islamic banks in Punjab, Pakistan. 317 valid questionnaires were received and used to obtain findings. Structural Equation Modeling (SEM) was used through Smart PLS to test the study hypotheses. Findings of the study identified that trialability and compatibility has a positive role to promote IFI. Furthermore, compatibility has a positive effect on IFI, however, trialability does not influence IFI directly, it has indirect effect through Islamic FinTech adoption (IFA). Findings of the study provided various important insights for the policymakers to promote IFI.