Leadership Style as a Driver of FinTech Orientation in Financial Institutions: The Mediating Role of Strategic Agility and Innovation

This study investigates the mechanisms by which leadership style influences FinTech orientation in financial institutions. Grounded in complexity theory and the dynamic capabilities framework, this study explores how strategic agility and innovation function as mediating capabilities linking leadership behavior to FinTech readiness. A structured quantitative survey was administered to top managerial-level employees across banks, insurance firms, and microfinance institutions. A total of 104 complete and valid responses were collected using Google Forms. Structural Equation Modeling using the CB-SEM technique was applied to analyze the data and assess the direct and mediated relationships among the constructs. The study reveals that leadership style has a significant impact on FinTech orientation, both directly and indirectly, through its impact on strategic agility and innovation (total effect leadership style  FinTech: = 0.457, t = 5.632). While the overall influence of leadership on FinTech orientation was found to be significant, the direct influence was reduced when the mediating factors were controlled for (indirect effects: leadership style  strategic innovation  FinTech:  = 0.227, t = 2.121, p = 0.034; leadership style  strategic agility  FinTech:   = 0.420, t = 3.455, p = 0.001). Strategic agility was the strongest predictor, highlighting its critical role in achieving responsiveness and agility in a financially challenged environment with structural barriers (strategic agility  FinTech:   = 0.512, t = 2.961, p = 0.003; compared with strategic innovation  FinTech:   = 0.330, t = 2.064, p = 0.037; and leadership style  strategic agility:   = 0.580, t = 5.262, p < 0.001 vs. leadership style  strategic innovation:   = 0.486, t = 4.549, p < 0.001). This study makes a significant contribution to the literature by empirically testing the capability-mediated model in an economy beset by conflict, supporting the need to enhance leadership practice to develop internal agility and innovation. The study also provides practical insights to financial institutions’ professionals on how to overcome structural issues to enable digital transformation through the use of capabilities supported by strong leadership. Beyond finance, the findings demonstrate how leadership-enabled dynamic capabilities can accelerate digital transformation, strengthen organizational resilience, and support innovation management in structurally constrained and uncertain environments.

Financial nstitutions; FinTech; Leadership style; Strategic agility; Strategic innovation

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