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Article

Pioneering Perception of Green Fintech in Promoting Sustainable Digital Services Application within Smart Cities

by
Hoda M. Aboalsamh
1,
Laith T. Khrais
2,* and
Sami A. Albahussain
1
1
Department of Business Administration, College of Business Administration, Imam Adulrahman Bin Faisal University, Dammam 34212, Saudi Arabia
2
Department of Business Administration, College of Applied Studies and Community Services, Imam Adulrahman Bin Faisal University, Dammam 34212, Saudi Arabia
*
Author to whom correspondence should be addressed.
Sustainability 2023, 15(14), 11440; https://0-doi-org.brum.beds.ac.uk/10.3390/su151411440
Submission received: 7 May 2023 / Revised: 17 July 2023 / Accepted: 21 July 2023 / Published: 24 July 2023
Browse Figure
Review Reports Versions Notes

Abstract

:
The emergence of fintech has revolutionized the traditional financial landscape, offering fast and efficient services to consumers while reducing costs for financial institutions. With the continuous advancements in technology, the fintech industry is expected to grow rapidly in the coming years, providing greater access to financial services and increasing financial inclusion across the globe. The main question explored in this study was: What is the impact of green Fintech on sustainability and consumer behavior within smart cities? The objectives of this study included analyzing the perceptions of consumers in the Middle East concerning green fintech’s impact on sustainability and examining green fintech policies and initiatives to identify how they shape consumer behavior. The current study employed qualitative methods, where eight participants were sampled and interviewed regarding the topic and six primary articles were sampled and analyzed. The interviews were conducted online, recorded, and later transcribed for analysis. The results show that green fintech promotes sustainability by encouraging companies to invest in renewable energy as a strategy for accessing more funds at lower interest rates. Moreover, green fintech was realized to enhance financial inclusion as small businesses and startups could easily access funding for innovating technologies that promote sustainability. However, a major challenge hindering the extensive adoption of green fintech identified was the limitation imposed by current regulatory framework. A conclusion from this study is that increasing consumer awareness of green fintech products and their benefits can help increase the rate of implementation of sustainable practices in organizations.

1. Introduction

Fintech refers to the incorporation of modern technologies such as artificial intelligence (AI) and the Internet of Things (IoT) in finance to automate the supply chain and digitalize financial services for customers [1]. In this regard, fintech streamlines transaction processes, eliminating unnecessary steps, and ensuring customers can easily access finances, which can be achieved through mobile banking, cryptocurrency trading, or peer-to-peer services such as CashApp. Meanwhile, green fintech involves using fintech to prioritize funding to businesses that use clean energy sources and engage in environmental protection efforts [2]. Green fintech requires AI and IoT to quantify climate risks, show how businesses can reduce the risks, and track the effect of the implemented solutions. In such instances, the identified businesses are afforded lower interest rates and higher funding due to their model of operations, which uses sustainable technologies.
Some initiatives have been launched in the Arab World, particularly in the Middle East region and North Africa. For instance, Saudi Arabia, as an example of a Middle Eastern country, has recently made significant efforts toward the development of smart cities as well as the adoption of sustainable technologies, such as “The Line City”. On the other side, Egypt has also initiated another sustainable smart city called “NOOR Smart City”. Several initiatives, such as the Saudi Green Initiative and the Middle East Green Initiative, have been launched by Saudi Arabia to promote sustainability [3]. Green fintech is a crucial focus area in Saudi Arabia; the country has witnessed a rise in the adoption of fintech solutions, including initiatives that prioritize sustainability. A key example is the adoption of the sustainable finance framework by Saudi Arabia’s Capital Market Authority in 2019. The initiative is aimed at encouraging investment projects that promote positive social and environmental impacts [4]. As such, the country attaches great importance to the achievement of green growth in their economies through sustainable economic development. To continually achieve sustainable economic development, various researchers have indicated the need to encourage the growth of strategic green industries and the effective empowerment of the financial sector, which has been pointed out as a core aspect of the modern economy [5,6]. Essentially, the evidence points out that to promote the economy, there is a need for the development of high-quality finance that aids in avoiding economic uncertainties.
In the particular case of Saudi Arabia, the adoption of sustainable technologies and green fintech is in line with the country’s Vision 2030, which incorporates an elaborate plan aimed at reducing Saudi Arabia’s dependence on oil as the economy transits towards both diversity and a sustainability-themed “New Smarter Economy” [7]. In addition, initiatives such as the National Renewable Energy Program and the Saudi Energy Efficiency Program have also been launched by the Saudi Arabian government to promote renewable energy and energy efficiency in the Kingdom [8]. In essence, Saudi Arabia utilizes fintech to create new economic models, processes, and applications that significantly impact how financial institutions, financial markets, and financial services are provided. The underlying technologies through which fintech can be applied include artificial intelligence, big data, cloud computing, blockchain, and the Internet of Things [9]. These technologies are crucial in using fintech and sustainability within smart cities.
Specific instances of green fintech implementation include implementing a renewable energy management system (REMS) in Saudi Arabia. The system carries out daily power generation forecasts, which the system operator utilizes to optimize power generation [10]. Top-notch geospatial and web interface technologies are applied to enhance the visualization and interaction with data from power plants to predict variables that, in turn, optimize power generation and consumption to achieve sustainability. The Line project, currently under development in Saudi Arabia, has been classified as the most modern of smart cities, as it seeks to rely totally on natural energy and minimize the use of automobiles, thus preserving 100 percent of natural life [11]. Moreover, Saudi Arabia’s Vision 2030 focuses on a digital transformation plan, an essential aspect of green fintech implementation in which big data drive decisions. Initiatives such as the national information center have been launched to collect and analyze data to inform policy and thus improve digital service application sustainability [12]. Data drive key policies of green fintech applications in Saudi Arabia to enhance economic sustainability.
There are ongoing debates and controversies surrounding the aspect of green fintech and its implications on sustainability. Specifically, Nassiry investigated the role of fintech in unlocking green finance. In the assertions by the researcher, green fintech facilitates a transition towards economic sustainability despite challenges surrounding its application, such as digital transformation difficulties [13]. However, according to research by Monahan, smart cities created using green fintech applications can exacerbate existing social inequalities despite holding the potential to improve quality of life for citizens [14]. Evidence points to the need to ensure that the implementation of green fintech does not further create social problems that may defeat the very purpose of sustainability.
Controversies also exist regarding the potential of fintech to create financial products that encourage sustainable behavior, with researchers seeming to not agree on whether the products can aid in shifting financial flows towards more sustainable activities. Specifically, while Puschmann, Hoffmann, and Khmarskyi considered green fintech as steering investment efforts toward sustainability [15], Liu and others argued that the products are novel and have yet to register significant adoption by the private and public sectors [16]. Therefore, a balance must be struck between applying green fintech and its promotion among the general public. A significant body of research has also considered the impact of smart cities on privacy and data protection. Researchers have argued that while these technologies can improve efficiency and quality of life, they also involve collecting and storing vast amounts of personal data, thus raising concerns about the security and privacy of data [17,18]. Finally, the role of government regulation in promoting green fintech is also an area of debate. Liu and others have argued that government intervention is necessary to drive progress toward sustainable economic growth [16]. However, Devidze argued that government regulation may stifle innovation and, in turn, economic growth [19]. Therefore, there is a need to explore further evidence to understand the role of the various factors in green fintech implementation.
The current research is underpinned by the technology acceptance model (TAM) theory. TAM posits that the widespread adoption of a particular technology in an industry is influenced by two key factors, namely perceived usefulness and perceived ease of use [20,21,22]. In this case, perceived ease of use indicates how confident users feel that adopting a proposed technology will require little mental and physical effort while perceived usefulness indicates whether adopting a specific technology improves performance [23,24]. A summary of the TAM is shown in in Figure 1 [25].
There are several studies that have analyzed application of TAM theory in fintech adoption [26,27,28]. The studies have shown that fintech adoption is influenced by perceived ease of use because users find that it is friendly and easy to operate [29,30]. Similarly, research has shown that perceived usefulness of fintech entails its ability to provide convenience to users since they can access their finances online and make transactions without visiting the bank [31,32,33]. However, there is a research gap on how the TAM model applies to green fintech and factors that influence its adoption among users. The current study aims to fill this gap.

Aims and Objectives

The main aim of the current study is to investigate the impact of green fintech on sustainability and consumer behavior within smart cities. To achieve this aim, the objectives of this study include the following:
  • Analyzing the perceptions and attitudes of consumers towards green fintech and its potential to support sustainability and consumer behavior.
  • Analyzing the critical green fintech initiatives and policies implemented and their effects on sustainability and consumer behavior.
The green fintech adoption solution is crucial for sustainable economic development. Along with a “New Smarter Economy” based on the application of technologies, including AI, big data, and IoT, among other technologies, is crucial for green fintech implementation within smart cities. However, there is still a significant level of controversy, such as the potential of Fintech to exacerbate social inequalities and encourage sustainable behavior and its impact on data protection and privacy. Further research is necessary to understand the role of various factors in implementing green fintech.

2. Materials and Methods

2.1. Research Design and Methods

The current research employed a qualitative method to explore green fintech’s impact on consumer behavior and sustainability within smart cities. The qualitative method entails gathering and analyzing non-textual data to gain in-depth insight into a specific topic [34]. A significant benefit of the qualitative approach is that it requires fewer resources and less time to gather comprehensive data regarding a phenomenon [35]. For this study, a qualitative method was applied by conducting interviews among selected participants as well as analyzing selected studies to determine the practical effects of green fintech in promoting sustainable digital services. The research method was completed in three main steps: search strategy and participant sampling, data collection, and data analysis.

2.1.1. Sampling and Search Strategy

A purposive sampling technique was used to select individuals as participants for this study. Purposive sampling entails selecting individuals based on specific characteristics, such as knowledge or skills, that are of interest to a study [36]. A key advantage of purposive sampling is that it is flexible and enables the researcher to save time and resources during sampling [37]. For this research, purposive sampling was applied by initially selecting three individuals who had experience in green fintech programs. The participants were selected via the LinkedIn platform, where specialty in green fintech was searched for and then filtered by Middle Eastern region, which includes Saudi Arabia. Specifically, the participants were required to provide proof of engaging in green fintech programs either through training or work experience. The researcher also relied on snowballing to recruit the remaining participants. The snowballing approach involved requesting the selected participants to recruit colleagues with similar skills and experiences in green fintech. A total of 13 individuals were obtained after using snowballing, but after applying inclusion criteria, only 8 participants were sampled. Eight participants were sampled because this is in line with views of Moser and Korstjens, showing that five to ten participants are required in phenomenological qualitative research to ensure data saturation [38]. Table A1 in Appendix A reveals that the individuals selected had knowledge and professional experience in green fintech, which improved the reliability of the obtained findings.
Meanwhile, a detailed search strategy was used to select relevant articles for secondary research. The process began by first generating keywords such as “green”, “Fintech”, “digital”, “services”, “perception”, “smart”, and “cities”. Suitable phrases were created by using Boolean operators such as AND, NOT, and OR. The phrases generated included “green Fintech AND digital services”, “perception of digital finance OR Fintech”, and “green Fintech AND sustainable smart cities”. The second step involved creating detailed inclusion and exclusion criteria to refine the search and ensure only articles aligned with this study objective are selected [39]. The inclusion criteria involved selecting only primary studies to improve result reliability, studies published within the past five years—from 2018 to 2023—to ensure latest trends on the topic, and articles covering fintech and how it promotes sustainability. Exclusion criteria entailed articles published before 2018, those using secondary methodology such as systematic reviews, and studies that did not show the sustainability aspect of fintech. Six articles were sampled after meeting the set criteria, as shown in Table A2 in Appendix A.

2.1.2. Data Collection

The first step in data collection was contacting the sampled individuals via the LinkedIn platform, phone, and administering consent forms via email. Those who signed the forms were included as participants and engaged in the interview process. After obtaining consent, the researcher consulted the participants on the best time for conducting the interview. The interviews were conducted online using the Zoom platform. A crucial benefit of online interviews is that they offer convenience and flexibility since they can be conducted without the need to travel to meet participants, hence saving resources [40]. Each interview session was completed in about 30 min. The interview sessions were recorded and later transcribed for analysis. During the interview process, the researcher acted as a moderator by providing clarification on the questions to ensure the participants understood the intended meaning of the questions. Additionally, data were collected from sampled articles by identifying the relevant studies’ findings that were aligned with this research’s goals. The obtained findings were triangulated with the gathered interview results to increase insight into the topic.

2.1.3. Data Analysis

The current study employed a thematic analysis approach to analyze the collected data. A crucial strength of the thematic analysis is that it offers flexibility, enabling the researcher to interpret the data in different ways [41]. The first step in the thematic analysis involved transcribing the audio interview files to textual format using the software Otter.ai. The data were then cleaned and organized to remove sections with incomplete responses or questions the participants skipped. Firstly, the data were reviewed to familiarize the researcher with the interview responses and identify the main ideas expressed by participants. Secondly, the major responses were highlighted using different colors and coded based on the major concepts expressed. For instance, concerning factors influencing adoption of green fintech, the positive and negative factors were considered, and relevant responses highlighted using different colors as codes. The codes where then grouped into suitable subthemes and themes aligned with this research’s goals. Similar steps were used in analyzing the data from published sources. A writeup of the results was then completed based on the developed themes.

2.2. Materials

There were several materials used in gathering data for this study. Firstly, an information sheet was provided to the targeted individuals during recruitment to inform them of the goals of this research and their roles as participants. The information sheet ensured that the individuals voluntarily decided whether to sign up as participants in this study. Moreover, ethical principles of anonymity and confidentiality were highlighted in the consent forms. Thirdly, the participants were provided with interview sheets to help them review the questions in preparation for the interview. The interview form was designed in two sections. The first section gathered data on participants’ demographic characteristics, including age, gender, and work experience. Meanwhile, the second section covered five questions and collected data on different issues related to the research topic, including the application of green fintech and possible impacts on consumer behavior. Fourthly, this study used published sources including journal articles and reports to gather secondary data to use in exploring the topic of how green fintech promotes sustainability of digital services in smart cities.

3. Results

The themes generated from the analysis are summarized in Table A3 based on data from interviews and the articles analyzed [42,43,44,45,46,47]. The results in Table A3 are explained in the next subtopics.

3.1. Influence of Green Fintech on Supporting Sustainability Efforts

This study investigated the influence of green fintech on supporting sustainability efforts. The first observation was that green fintech enables sustainability by promoting investments in renewable energy. Expressly, Respondent 2 indicated that green fintech supports renewable energy development by providing innovative financial solutions and technologies that make investments in renewable energy projects easier. The respondent explained
“Yes. Green Fintech has been crucial to KSA in how it has generated technologies and innovations geared towards influencing green energy investments. Among these are green bonds, blockchain, and crowdfunding.”
(R2)
The views imply that green Fintech supports green energy investments by providing technologies, innovations, and financial solutions that support renewable energy initiatives. Similar views to those of Respondent 2 were also obtained from Respondent 5:
“Yes. A notable case in point in KSA is carbon trading platforms which have KSA have made commitments in allowing businesses and individuals to buy and sell carbon credits which essentially incentivizes the reduction of emissions and support renewable energy projects.”
(R5)
The view indicates that green fintech can encourage investments in green energy solutions by providing attractive ways entrepreneurs can benefit from their investments. In Saudi Arabia, the incentives from initiatives such as carbon trading eventually reduce big companies’ carbon emissions.
The second observation indicated that green fintech improves financial inclusion, as noted in two of the six selected articles [44,47]. Specifically, Hoang et al. highlighted that green fintech promotes financial inclusion by improving access to capital through mobile loans that require little security while providing flexible repayment options [44]. In this way, green fintech ensures that a large number of individuals do not travel physically to banks to transact, thereby promoting sustainable practices through its model. Zeng et al. agreed with the views of Hoang et al. but added that financial inclusion in green fintech is because the financial model reduces barriers to accessing energy investments by enabling the general public to sell solar energy to the national power grid in a sector that was previously monopolized by governments and corporations [47]. In this way, more people become interested in generating renewable energy and using green fintech programs to indirectly invest in the sector, thereby promoting sustainability.

3.2. Factors That Influence the Adoption of Green Fintech Products or Services

The current study also investigated the various factors influencing green fintech product or service adoption. The first observation was that the level of government and regulatory support significantly influences the adoption of green fintech. Specifically, Respondent 6 argued that detailed and supportive regulations encourage the development and adoption of green fintech products and services. The respondent argued
“Government support in terms of clear and supportive regulations for green Fintech is a plus to their adoption.”
(R6)
Their observation implies that government presence through regulatory bodies plays a crucial role in the creation of clear policies, hence positively influencing green fintech products and services. The assertions mirror those provided by Respondent 1, who argued that the creation of standards and certifications can aid consumers in identifying green fintech products that hold solutions to sustainability challenges. The respondent argued
“The government can also come up with standards and certifications programs for companies to adopt green Fintech to drive sustainability programs.”
(R1)
This observation likewise indicates the crucial role that government regulation can play in setting targets for companies to adopt green fintech, hence meeting sustainability goals.
The second finding from two of the articles sampled showed that perceived usefulness of green fintech improved its adoption rates [42,45]. In particular, Bouteraa et al. explained that green fintech’s perceived usefulness in terms of time saving and effective finance management influences consumers to adopt green fintech models [42]. However, the authors emphasized that mediating factors were the availability of adequate online security to protect customer finances and available technical support. Ranchber shared similar views, explaining that in developing green fintech platforms, customers views and feedback should be considered to ensure the programs are aligned with not only sustainable practices but also consumers’ financial needs [45]. In this respect, the studies revealed that consideration of consumer needs and the application of green fintech improves adoption rates.

3.3. Impact of Green Fintech Initiatives on Consumer Behavior

Further, this study investigated the impact of green fintech on consumer behavior, for which two main subthemes were observed. The first observation indicated that green fintech solutions improve consumers’ adoption of sustainable behaviors, as indicated by four out of the eight respondents interviewed. Specifically, Respondent 8 argued that
“Green Fintech adoption in KSA and Egypt, in my opinion, improves awareness about eco-friendly financial products and services which consumers can adopt hence improving the sustainability behaviors.”
(R8)
The view implies that green fintech adoption has the effect of improving awareness among consumers, which improves sustainability, since consumers gain the ability to independently adopt products and services that improve sustainability. The views of Respondent 6 are similar to those of Respondent 7, who argued that green fintech increases the adoption of sustainable energy spending, and explained
“Green Fintech programs sometimes offer rewards and incentives for sustainable financial behaviors which can encourage sustainable spending such as sustainable energy adoption.”
(R7)
This observation indicates that rewards for adopting green fintech can reduce greenhouse gas emissions through shifting consumer behavior.
The second finding from the analyzed studies was that green fintech initiatives promoted environmental values among consumers who began to make careful purchase and investment choices to align with climate sustainability [43,46]. Specifically, Gannon and Hieker observed that due to green fintech programs, more millennials were focused on sustainable consumption and investment options [43]. Similar views were shared by Wang et al., indicating that green fintech programs improved consumer uptake of green finance as well as their levels of satisfaction, since they felt a sense of responsibility for environmental protection [46]. The findings from the two studies imply that green fintech positively impacts consumer behavior by enhancing awareness of sustainable practices and providing a platform for contributing towards environmental protection.

3.4. Challenges to the Implementation of Green Fintech Initiatives

Finally, this study investigated the challenges to implementing green fintech initiatives and obtained two main findings. The first finding indicated that the limited regulatory framework of green fintech still limits its adoption. Specifically, Respondent 4 argued:
“Despite a made effort, the regulatory framework of green Fintech is still significantly limited, and this limits its adoption across a wide range of industries.”
(R4)
The observation from this respondent indicates that Middle Eastern countries are yet to achieve the required level of regulatory framework and incentives to support the implementation of green fintech. Similarly, Respondent 3 argued that
“The regulations of green Fintech still point to the need to develop more regulations to enhance implementation.”
(R3)
This view shows that the shortage of regulatory frameworks affects the implementation of green fintech through proper regulatory structures, hence pointing to the need for further enhancements.
The second observation made in the current study on barriers to implementing green fintech initiatives is data challenges and security concerns, as pointed out by five of the eight respondents interviewed. Specifically, Respondent 7 posited that
“Despite the advantages of green Fintech, we know it requires the collection and storage of large amounts of … you know data security concerns arise.”
(R7)
This view implies that to adopt green fintech safely, concerns about data security should be addressed through aspects such as data security regulation. In the same breath, Respondent 8 also indicated that
“You know that Middle Easter countries are yet to reach that point where we say we trust green Fintech companies with our data…not enough data security regulations.”
(R8)
Their view demonstrates a gap between green fintech implementation and regulation, thus creating data security concerns that act as a barrier to green fintech adoption.

4. Discussion

The current study’s findings pointed out two main results regarding the influence of green fintech in supporting sustainability efforts. The first observation was that green fintech promotes investments in renewable energy. This observation is consistent with the observations made by Investors Fiduciary Trust Company (IFTC), showing that businesses’ fintech adoption enhances the efforts of businesses that engage in environmental protection through the use of green energy [2]. This evidence means that as green fintech adoption increases, sustainability efforts are enhanced through the involvement of more businesses in renewable energy investments. The result on green fintech improving sustainability is also aligned with TAM theory, which opines that perceived usefulness of a technology influences its widespread adoption in an industry [31]. In this regard, green fintech provides the incentive for companies to engage in sustainable technologies to access higher funding or loans at a lower interest rate than market rates. Further consistent views to those of the current study on the influence of green fintech in supporting sustainability efforts were also observed by Ghanem and Alamri, who pointed out that sustainability efforts in Saudi Arabia have been promoted by fintech through initiatives such as the Saudi Green Initiative and the Middle East Green Initiative, which integrate environmental protection, energy transition, and innovative sustainability programs [3]. These observations and the current study’s findings imply that green fintech is a crucial contributor to promoting sustainability efforts.
The second observation made by the current study was that green fintech improves financial inclusion, which promotes sustainability. Essentially, findings from Hoang et al. [44] and Zeng et al. [47] indicated that green fintech enables startups and small businesses to easily access funding with flexible terms and if they seek to invest in projects that promote environmental sustainability. This observation can be explained using TAM, which emphasizes that the perceived usefulness of a technology influences whether consumers show intention to use [25]. In this case, the perceived benefit of increased access to credit for sustainable projects can influence more consumers to engage in green fintech. However, the result of green fintech improving financial inclusion is inconsistent with the assertions of Monahan, who argued that existing social inequalities might be exacerbated by green fintech [14]. These observations imply that, to be successful, implementing green fintech should involve the needs of a wide variety of people.
Additionally, the results showed that perceived usefulness of green fintech improves adoption. Specifically, findings from Bouteraa et al. [42] and Ranchber [45] showed that effective financial management and time saving were crucial benefits from green fintech that attracted consumers. The results align with TAM theory, which emphasizes that perceived ease of use and technology usefulness improves its adoption rates [31,32,33]. This observation is also consistent with the views of Vinodkumar and Alarifi, who argued that green fintech initiatives by Saudi Arabia’s Capital Market Authority have succeeded due to awareness of the importance of these products [4]. Similarly, Salam and Khan’s findings support the current study’s views on perceived importance as a critical contributor to the success of green fintech, arguing that initiatives launched by the KSA, such as the National Renewable Energy Program and the Saudi Energy Efficiency Program, are crucial in economic diversification [8]. The results suggest that to improve green fintech adoption, awareness creation should be prioritized to gain stakeholder support. Moreover, it was noted that government and regulatory support influences green fintech adoption. This finding resonates with Ignatyuk and others, who asserted that government regulatory initiatives are essential in addressing data privacy and security concerns, hence supporting the adoption of green fintech [18]. However, inconsistent views to those of the current study regarding the importance of government regulation were voiced by Devidze, who argued that government regulation might stifle innovation and economic growth [19]. Despite the differences in evidence, government support is necessary to improve green fintech adoption safely.
Concerning the impact of green fintech initiatives on consumer behavior, the findings show that green fintech adoption improves sustainable behaviors. This observation is consistent with the views of Puschmann, Hoffmann, and Khmarskyi, who pointed out that green fintech steers efforts by consumers to invest in sustainability [15]. However, inconsistent views were provided by Liu and others, who argued that green fintech products or services are yet to record significant adoption, as they are still novel initiatives [16]. These assertions imply a need to improve the awareness of green fintech to enhance their adoption and influence on consumer behavior. The obtained results also showed that green fintech improves sustainable energy spending by consumers. This observation is similar to those provided by Makki and Alqahtani, who observed that green energy investments in the KSA have increased with the adoption green fintech, in line with Saudi Arabia’s Vision 2030 [12]. Additionally, the findings extracted from Gannon and Hieker [43] and Wang et al. [46] indicated that green fintech programs led to sustainable consumption and investment decisions by consumers, which enhanced their satisfaction. These results align with TAM theory [20] because they show that the perceived green fintech usefulness in improving emotional wellbeing of consumers can influence adoption rates. These views reveal that green fintech influences consumer behavior and can improve sustainability efforts.
Finally, concerning the challenges to implementing green fintech initiatives, this study revealed the limited regulatory framework for green fintech, which limits green fintech adoption. The result is aligned with the TAM theory, which shows that perceived ease of use is a crucial factor influencing technology adoption [20,21,22]. As such, addressing legal issues of green fintech can result in more people understanding its framework and aiming to use it as required. The obtained result is also consistent with Liu et al.’s views, showing that although efforts have been made by governments to improve regulation of fintech, there were still many gaps in framework that hinder the adoption of green fintech initiatives [16]. These observations suggest that to encourage the adoption of green fintech, policies, and regulatory frameworks should be implemented. Moreover, the results showed that data challenges and security concerns also limit green fintech adoption. This result suggests that improving data safety is critical to promoting the confidence of consumers in seeking green fintech products. This finding is similar to the results of Singh, who noted that green fintech initiatives still raise concerns regarding personal data privacy [17]. Similarly, Ignatyuk also argued that the large amount of data needed to implement green fintech requires effective data regulatory policies, without which the adoption of green fintech may not be effectively implemented [18]. These observations imply the need to enhance the data protection framework to enhance green fintech success. In this respect, strategies such as multiple authentications are needed for green fintech to ensure there is no data breach and consumers’ finances are protected against online hackers.

5. Conclusions

The current study sought to investigate the perception of green fintech in promoting sustainable digital services applications. This study’s first objective involved analyzing the perceptions and attitudes of consumers towards green fintech and its potential to support sustainability. The second objective was to identify and analyze critical green fintech initiatives and policies implemented and their effects on sustainability and consumer behavior. To achieve the set research goals, a qualitative method was employed wherein primary research involving conducting interviews among eight participants with experience in green fintech was conducted as well as secondary research involving analysis of six primary studies.
The first objective was achieved by demonstrating that green fintech supports sustainability efforts through innovative solutions and technologies to support renewable energy. Green fintech was also observed to improve financial inclusion because it ensures that startups and small businesses can easily access funding in flexible repayment terms when seeking to invest in environmental protection projects. The second objective was achieved by demonstrating that green fintech policies and initiatives improve consumer adoption of sustainability efforts such as sustainable energy spending. In this case, it was realized that organizations that recognize the benefits of green fintech funding incorporate sustainable technologies in their operations to access reduced interest rates and higher funding for their projects. However, the main limitations to adopting green fintech initiatives are data security concerns and limited awareness of these products and services.
This study provides a beneficial understanding for practice and imply that there is a need to enhance consumer awareness of the benefits of green fintech to improve its adoption. The strategy can ensure that more entrepreneurs understand the benefits of green fintech and hence align their operations with sustainable technologies to access more funding. This study also recommends creating elaborate policies on data protection and green Fintech to facilitate the implementation of green fintech initiatives. Developing a comprehensive legal framework on green fintech can ensure that more investors feel confident in seeking green fintech products and undertaking projects that emphasize sustainability. However, a key weakness of this study was a small sample size of only eight participants and six articles, which means that the findings cannot be generalized. In this regard, there is need to use more participants to validate the observed findings. The other limitation was that this study only relied on qualitative methods, which hindered verification using statistical approaches. A qualitative method was used due to restrictions of time and resources. Therefore, future researchers should include statistical analysis to better understand the extent of green fintech benefits to consumers. The third limitation was that responses in the research could not be analyzed statistically to distinguish significant views from less important ones. In this regard, the results of this research should be used as a foundation for further research on the green fintech topic within the Arab world.
For future studies, the current study recommends conducting further research on the influence of green fintech products and services on economic growth. Although the current research revealed that green fintech adoption can improve sustainable digital practices among consumers, the economic effect was not explored. In this respect, further research is required to understand the extent to which green fintech can translate to economic growth. Moreover, this research showed that limited regulatory framework hinders the adoption of green fintech. Therefore, future investigation is needed on policies related to green fintech that can be implemented to increase its adoption among organizations. Moreover, the current study was conducted in the Middle East region, where economic and infrastructural conditions differ from those in other developed countries. Therefore, additional research can be conducted in other regions. Finally, the findings showed that developing a robust legal system for green fintech can ensure that stakeholders understand the framework within which to operate. The current study also contributed to expanding the existing literature on green fintech’s benefits by confirming previous studies’ findings that it improves sustainability efforts.

Author Contributions

Conceptualization, H.M.A., L.T.K. and S.A.A.; Methodology, L.T.K.; Validation, H.M.A., L.T.K. and S.A.A.; Formal analysis, H.M.A., L.T.K. and S.A.A.; Investigation, H.M.A., L.T.K. and S.A.A.; Resources, H.M.A., L.T.K. and S.A.A.; Writing—original draft, H.M.A., L.T.K. and S.A.A.; Writing—review & editing, H.M.A., L.T.K. and S.A.A. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Not applicable.

Conflicts of Interest

The authors declare no conflict of interest.

Appendix A

Table
Table A1. Participants demographics.
Table A1. Participants demographics.
Respondent CodeProfession/PositionAge Range (Years)Gender
R1Manager at a bank36–45Male
R2Public policy manager experienced in climate change26–35Female
R3Director of engineering company using green fintech46–65Male
R4Professor of energy studies 36–45Female
R5Postgraduate student and expert in sustainability practices 18–25Male
R6Professor of accounting and Fintech in Saudi Arabia26–35Female
R7Consulting building engineers implementing green fintech projects36–45Male
R8Manager of the private organization on environmental conservation26–35Male
The eight participants were drawn from different backgrounds, genders, and ages to minimize sampling bias, which can adversely affect the generalization of the findings.
Table
Table A2. Articles selected for analysis.
Table A2. Articles selected for analysis.
Author (Date)CountryStudy Title
Bouteraa et al. (2022) [42]Malaysia Challenges affecting bank consumers’ intention to adopt green banking technology in the UAE: a UTAUT-based mixed-methods approach.
Gannon and Hieker (2022) [43]UKEmployee engagement and a company’s sustainability values: a case study of a Fintech SME.
Hoang et al. (2021) [44]VietnamToward successful bank-Fintech partnerships: perspectives from service providers in an emerging economy.
Ranchber (2018) [45]SwedenStimulating green Fintech innovation for sustainable development: an analysis of the innovation process.
Wang et al. (2022) [46]ChinaMotivations influencing Alipay users to participate in the Ant Forest Campaign: an empirical study.
Zeng (2022) [47]ChinaSaving the world by being green with fintech: exploring the contradictions inherent in the case of Ant Forest.
Table
Table A3. Results summary regarding green.
Table A3. Results summary regarding green.
Green Fintech Influence in Supporting SustainabilityFactors Influencing Adoption of Green FintechImpact of Green Fintech on Consumer BehaviorImplementation Challenges of Green Fintech
Promoting investments in renewable energy by companiesPerceived usefulness of green fintech significantly improves adoptionEffective green fintech solutions improve consumers’ adoption of sustainable behaviorsLimited regulatory framework of green Fintech in KSA still limits its adoption
Improves financial inclusion by enabling innovations into affordable financial productsThe level of government and regulatory support also significantly influences the adoption of green fintechGreen fintech initiatives promoted environmental values among consumersData safety challenges and security concerns hinder the adoption of green fintech services
The results summary indicated was based on perceptions of eight participants and data from the six primary studies chosen.

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Sustainability 15 11440 g001 550
Figure 1. TAM.
Figure 1. TAM.
Sustainability 15 11440 g001
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Aboalsamh, H.M.; Khrais, L.T.; Albahussain, S.A. Pioneering Perception of Green Fintech in Promoting Sustainable Digital Services Application within Smart Cities. Sustainability 2023, 15, 11440. https://0-doi-org.brum.beds.ac.uk/10.3390/su151411440

AMA Style

Aboalsamh HM, Khrais LT, Albahussain SA. Pioneering Perception of Green Fintech in Promoting Sustainable Digital Services Application within Smart Cities. Sustainability. 2023; 15(14):11440. https://0-doi-org.brum.beds.ac.uk/10.3390/su151411440

Chicago/Turabian Style

Aboalsamh, Hoda M., Laith T. Khrais, and Sami A. Albahussain. 2023. "Pioneering Perception of Green Fintech in Promoting Sustainable Digital Services Application within Smart Cities" Sustainability 15, no. 14: 11440. https://0-doi-org.brum.beds.ac.uk/10.3390/su151411440

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