Digital Financial Innovation as a Catalyst for Economic Development: Evidence from NCR Region of India

Abstract

This study examines the impact of digital financial innovation on economic development, focusing on the National Capital Region (NCR) of India. Digital financial innovation was conceptualized through four dimensions—perceived ease of use, trust, attitude, and perceived cost—while economic development was assessed using two indicators: standard of living and overall economic progress. Primary data were collected through a structured questionnaire and analyzed using structural equation modeling (AMOS). The results reveal that perceived ease of use, trust, and positive attitudes significantly enhance the adoption of digital financial services, thereby contributing to improved standards of living and economic growth in the region. Conversely, high perceived costs were found to hinder the adoption of such innovations. The findings highlight that digital financial innovation can serve as a vital driver of regional economic development if cost-related barriers are minimized and user trust is strengthened. The study’s limitations include its geographical focus on the NCR, which may restrict the generalizability of results to other regions, and its reliance on self-reported data, which could be subject to response bias. These insights offer valuable implications for policymakers, financial institutions, and technology providers aiming to foster inclusive economic growth through digital finance.