Bridging Innovation and Trust: A Mediated Model of FinTech Startup Success in Emerging Economies

Abstract

Purpose: This study investigates the determinants of success for FinTech startups in emerging economies, emphasizing the mediating role of innovation capability (IC) in transforming technology adoption, security, and customer trust into sustainable performance.
Design/methodology/approach: Using a quantitative design, the study collected responses from 287 FinTech startups across India through a structured questionnaire. Partial Least Squares Structural Equation Modeling (PLS-SEM) was applied to assess the direct and mediated effects among key constructs
Findings: The results confirm that technology adoption, security, and transparency significantly enhance customer trust, which in turn drives startup success. Crucially, innovation capability mediates these relationships—strengthening the pathways from technology, trust, and security to performance. The structural model shows strong explanatory power (R² > 0.40) and robust model fit (SRMR < 0.08).
Practical implications: The findings offer actionable insights for founders and investors: investing in innovation capability enhances the value of foundational trust and technological infrastructure. Policy support for innovation-driven FinTech ecosystems can accelerate success in emerging markets.
Originality/value: This study contributes a novel mediated model linking technological and relational enablers to FinTech success, with innovation capability as the central mechanism. It enriches FinTech and startup literature by clarifying how innovation bridges trust and technology in volatile, high-growth environments.