Exploring the influence of fintech on household consumption and debt dynamics: insights from the G20

Abstract

The rapid advancement of Financial Technology (FinTech) has a profound impact on domestic consumers' financial decision-making by enhancing convenience and access to a diverse array of financial services. This study aims to examine the relationship between FinTech development and domestic consumption and credit behaviors in G20 countries. Furthermore, it seeks to elucidate how factors such as economic growth, government education expenditure, and inflation mediate this relationship. Utilizing a ten-year period from 2012 to 2021, we employ both static and dynamic panel data models to ensure the robustness of our findings. The results demonstrate a significant positive influence of FinTech on domestic consumption across both analytical approaches. However, the dynamic analysis reveals that FinTech's impact on domestic debt depends on temporal changes and future expectations, suggesting a more complex relationship. Among the control variables, inflation emerges as the most influential factor in both models, indicating that price fluctuations significantly affect the propensity of G20 consumers to consume and incur debt.