Financial Innovation Strategies to Enhance the Sustainability of MSMEs in the Era of Economic Digitalization
Article Sidebar
Main Article Content
Abstract
This study examines financial innovation strategies designed to enhance the sustainability of micro, small, and medium enterprises (MSMEs) in the era of economic digitalization. The rapid development of digital technologies such as big data analytics, blockchain, and real-time financial monitoring has transformed the landscape of financial management for entrepreneurs. These innovations provide MSMEs with advanced tools to improve efficiency, optimize decision-making, and respond swiftly to market dynamics. Through digital financial transformation, MSMEs gain broader access to financial information, enabling the formulation of data-driven and adaptive business strategies. However, this transformation also introduces significant challenges, including limited digital literacy, data privacy concerns, cybersecurity risks, and high implementation costs that may hinder widespread adoption among MSMEs. While blockchain technology offers transparency and accountability in financial transactions, its utilization remains minimal due to regulatory uncertainty and cost barriers. The study finds that gradual adoption and context-based implementation of digital financial tools can mitigate risks and support sustainable business growth. To ensure long-term sustainability, MSMEs are encouraged to adopt a phased strategy for financial innovation beginning with automation of basic financial processes and progressing toward integrated digital ecosystems. Ultimately, financial innovation not only strengthens profitability and operational resilience but also fosters transparency, stakeholder trust, and competitiveness. In a broader perspective, it contributes to building a more inclusive, adaptive, and innovation-driven entrepreneurial ecosystem in the digital economy era.
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
References
Auer, R., & Claessens, S. (2020). Regulating Fintech: Financial stability, market conduct, and financial inclusion. Journal of Financial Stability, 48, 100913. https://doi.org/10.1016/j.jfs.2020.100913
Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77–101. https://doi.org/10.1191/1478088706qp063oa
De La Rosa, A. (2019). Digital finance and small business sustainability: A review of technological adaptation. International Journal of Entrepreneurship and Innovation Management, 23(4), 256–273.
Fanning, K., & Centers, D. P. (2016). Blockchain and its coming impact on financial services. Journal of Corporate Accounting & Finance, 27(5), 53–57. https://doi.org/10.1002/jcaf.22179
Gai, K., Qiu, M., & Sun, X. (2018). A survey on FinTech. Journal of Network and Computer Applications, 103, 262–273. https://doi.org/10.1016/j.jnca.2017.10.011
Gomber, P., Kauffman, R. J., Parker, C., & Weber, B. W. (2018). On the Fintech revolution: Interpreting the forces of innovation, disruption, and transformation in financial services. Journal of Management Information Systems, 35(1), 220–265. https://doi.org/10.1080/07421222.2018.1440766
Jahanshahi, A. A., Rezaei, M., Nawaser, K., & Khaksar, S. M. S. (2020). The role of cybersecurity in digital entrepreneurship and innovation. Journal of Entrepreneurship and Innovation in Emerging Economies, 6(1), 45–59.
Kim, Y., Park, Y. J., Choi, J., & Yeon, J. (2018). The adoption of mobile payment services for “Fintech.” International Journal of Applied Engineering Research, 13(2), 181–188.
Miller, P., & McCarthy, J. (2020). Digital transformation and financial innovation: Implications for management practice. Journal of Business Research, 118, 431–440. https://doi.org/10.1016/j.jbusres.2020.07.036
Müller, J. M., & Jensen, C. (2021). Digitalization and SMEs: Opportunities and barriers in financial management. Technological Forecasting and Social Change, 162, 120412. https://doi.org/10.1016/j.techfore.2020.120412
Nguyen, Q. T., Le, D. T., & Huynh, T. N. (2020). Cybersecurity challenges in financial technology: A review. Information Systems Frontiers, 22(5), 1123–1137. https://doi.org/10.1007/s10796-019-09985-4
Omar, A. R. C., Leach, D., & March, J. (2020). Innovation strategies and SME sustainability in the digital economy. Journal of Small Business and Enterprise Development, 27(7), 1201–1221. https://doi.org/10.1108/JSBED-11-2019-0361
Peters, G. W., & Panayi, E. (2016). Understanding modern banking ledgers through blockchain technologies: Future of transaction processing and smart contracts on the internet of money. In Banking Beyond Banks and Money (pp. 239–278). Springer. https://doi.org/10.1007/978-3-319-42448-4_13
Ritchie, J., Lewis, J., McNaughton Nicholls, C., & Ormston, R. (2014). Qualitative research practice: A guide for social science students and researchers. Sage Publications.
Ritter, T., & Pedersen, C. L. (2020). Digitization capability and the digitalization of business models in business-to-business firms: Past, present, and future. Industrial Marketing Management, 86, 180–190. https://doi.org/10.1016/j.indmarman.2019.11.019
Schmidt, C. G., & Sandner, P. (2017). Blockchain technology and the future of financial intermediation. Journal of Financial Perspectives, 4(3), 1–14.
Wamba, S. F., Gunasekaran, A., Akter, S., Ren, S. J., Dubey, R., & Childe, S. J. (2020). Big data analytics and firm performance: Effects of dynamic capabilities. Journal of Business Research, 70, 356–365. https://doi.org/10.1016/j.jbusres.2016.08.009
Zhu, K., Kraemer, K. L., & Dedrick, J. (2021). Information technology payoff in e-business environments: An international perspective on value creation of e-business in the financial sector. Journal of Management Information Systems, 21(1), 17–54. https://doi.org/10.1080/07421222.2004.11045797