Building Trust in FinTech: How Data Security and Digital Literacy Drive Service Adoption

Abstract

The recent brisk of fintech adoption and its extension into economic and business systems in Pakistan has led many users to remain unprepared to adopt digital financial services safely, exposing themselves to growing data security threats and hindering widespread fintech adoption. This research project was designed to investigate how digital literacy moderates the effect of data security on FinTech services adoption, mediated by customer trust. Data was collected through a self-administrated structured questionnaire survey from 100 fintech users. Using SPSS, the data was analyzed to examine the links between data security, customer trust, digital literacy, and fintech services adoption. This study’s results show that perceived data security positively affects fintech adoption and customer trust. Customer trust, in turn, affects the acceptance and use of fintech services positively and serves as a mediator between data security and fintech adoption. However, digital literacy had no moderating effect on the relationship based on data security and customer trust. Policymakers should prioritize data security frameworks and trust-building initiatives. Targeted interventions for undereducated, rural, and older populations can support equitable fintech adoption. Future research should explore why digital literacy's moderating effect was unsupported and examine additional factors affecting fintech adoption in developing countries contexts.