Fintech as an Enabler of Digital Economy Development in the Balkan Countries

This paper examines the role of FinTech in advancing digitalization across Balkan economies, analysing key drivers of FinTech adoption and its impact on digital economy development. Using a Principal Component Analysis (PCA) approach, along with descriptive statistics, ANOVA, and cluster analysis, the study identifies the principal factors influencing FinTech penetration and digital financial engagement.

The research utilizes a dataset encompassing key indicators of digital adoption, and digital sectors development across seven Balkan countries—Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Albania, and North Macedonia. Specific variables include digital payment penetration, mobile banking usage, internet access, ATM density per 100,000 adults, POS terminals per 100,000 adults, FinTech startup growth index, regulatory quality, financial literacy, and trust in digital finance.

Findings reveal significant disparities in FinTech adoption across the region, shaped by differences in regulatory policies, digital infrastructure, and population readiness to embrace digital financial solutions. While FinTech serves as the backbone of the digital economy by providing seamless and efficient financial services, the digital transformation is very modest in Balkan countries. Regression analysis further validates that FinTech adoption significantly influences the development of the digital economy. The findings demonstrate a strong positive correlation between the extent of FinTech adoption and the overall growth of the digital economy in the region.