HOW TECHNOLOGY ADOPTION DRIVES FINANCIAL PERFORMANCE THROUGH TRUST

Abstract

Micro, small, and medium-sized enterprises (MSMEs) often face challenges in optimizing operational efficiency and improving financial performance due to limited adoption of digital technologies, inadequate digital capabilities, and a lack of trust in digital financial services. This study examines the effects of adopting artificial intelligence (AI) and financial technology (fintech) on financial performance by investigating the sequential mediating roles of trust and financial efficiency. A quantitative research design was employed using structured questionnaires administered to 200 MSME owners and financial managers in Malang City, Indonesia. The proposed model was analyzed using partial least squares structural equation modeling (PLS-SEM). The results demonstrate that AI and fintech adoption within organizations enhances organizational trust, with fintech adoption exerting a particularly strong influence. Trust improves financial efficiency, which subsequently enhances financial performance. Furthermore, AI and fintech adoption indirectly influence financial performance through the sequential mediation of trust and financial efficiency. These findings extend the Technology Acceptance Model, Resource-Based View, and Signaling Theory by demonstrating that trust in digital technologies and improved financial management efficiency can jointly create organizational value.