Cultural Catalysts of FinTech: Baring Long-Term Orientation and Indulgent Cultures in OECD Countries

1 Introduction

In the rapidly evolving landscape of financial technology (FinTech), understanding the factors that shape consumer attitudes and behaviors toward these innovative solutions is of paramount importance (Kowalewski et al., 2021). One intriguing aspect that warrants investigation is the influence of cultural orientations on individuals’ appetite for FinTech. This research is focused on investigating the impact of cultures characterized by long-term orientation (emphasizing future rewards, perseverance, and thrift) and indulgence (prioritizing immediate personal satisfaction, leisure, and emotional expression) on the adoption and utilization of FinTech services within the context of the most economically developed and advanced nations globally, namely, the member states of the Organization for Economic Co-operation and Development (OECD).

FinTech has revolutionized traditional financial services, offering convenience, efficiency, and personalized experiences to users. However, its widespread adoption varies across countries, and cultural factors have been recognized as key drivers behind these disparities (Glavina et al., 2021). National culture, with its diverse dimensions and values, can significantly shape individuals’ perceptions, preferences, and behaviors in various domains. In particular, the cultural dimensions of long-term orientation and indulgence provide an intriguing lens through which to examine the FinTech appetite of individuals in different countries.

The conventional financial system has failed, especially in developing countries, to accommodate customers in the following arena: cost-efficient ways of performing financial obligations, ensuring transparency, secured systems, speed and convenience, and last but not least, accessibility (Cherchye et al., 2018; Schmidt & Hryckiewicz, 2006; Shimada & Yang, 2010). On the contrary, the new emerging financial phenomenon introduced in 1990 called ‘FinTech” has successfully solved the above concerns. Academics and practitioners have identified FinTech as critical for ensuring financial inclusion and long-term financial sustainability (Boratyńska, 2019). Apart from different micro and macro factors affecting FinTech appetite, cultural elements are ranked significant in the empirical literature for the cause of nurturing FinTech adoption.

The intention to adopt FinTech is shaped by how customers perceive the risk they are exposed to while exercising FinTech options (Tang et al., 2022). Several studies have found perceived usefulness, trust, perceived ease of use, self–efficacy, and social influence as crucial influencers in molding consumer’s perceptions toward FinTech adoption (Dapp, 2017; Kim et al., 2016; Koksal, 2016; Makanyeza, 2017; Singh & Srivastava, 2018; Wentzel et al., 2013). This study focuses on long-term orientation and indulgence, which group the aforementioned and several other individual-centric traits within a country to see as a mainstream influencer in molding FinTech appetite across borders. Following these individual-centric characteristics, a plethora of macro-level variables is listed in the research as determining FinTech heed. Technology diffusion, inequality, economic growth, optimism in the future financial outlook, economic freedom, and human capital are a few examples (Asongu & Le Roux, 2017; Comin & Mestieri, 2018; Kuperberg, 2020; Malisuwan et al., 2016).

Long-term orientation refers to a cultural mindset that emphasizes persistence, perseverance, and planning for the future. It reflects a society’s inclination toward long-term goals, delayed gratification, and sustainable growth (Darsono et al., 2021). On the other hand, indulgent cultures prioritize immediate gratification, personal enjoyment, and fulfilling desires in the present moment (Anyangwe et al., 2022). These cultural orientations can influence individuals’ attitudes toward new technologies, including FinTech, which often require a degree of trust, willingness to experiment, and long-term commitment.

Within the context of OECD countries, there exists a rich diversity of cultural orientations, ranging from countries with strong long-term orientation such as Japan and South Korea to more indulgent cultures like Spain and Italy. By exploring the relationship between these cultural dimensions and FinTech appetite, we can gain valuable insights into the underlying factors that shape consumers’ attitudes, adoption patterns, and usage behaviors across different OECD countries.

National culture in shaping FinTech appetite is a complex yet momentous dilemma. Some studies have examined the influence of national culture in crafting FinTech appetite (Cristofaro et al., 2022; Salcedo & Gupta, 2021). However, the role of indulgence versus restraints and long-term orientation versus short-term orientation has received less interest than other national cultural dimensions (Guo et al., 2018). This article follows Steers et al. (2008), who examine a simple, yet crucial dilemma: To what extent national culture influences the adoption of emerging technologies across the nations? There is a lack of grounded modeling that could assist in establishing the role of long-term orientation and indulgence in shaping FinTech heed, as well as a dearth of case studies discovering the impact.

The objectives of this study are twofold. First, it aims to investigate whether a significant relationship exists between long-term orientation and individuals’ inclination to adopt and utilize FinTech services. Second, it seeks to explore whether cultures characterized by indulgence exhibit distinctive patterns of FinTech adoption in comparison to societies with a stronger emphasis on long-term orientation. By examining these cultural influences on FinTech appetite, policymakers, financial institutions, and FinTech providers can gain a better understanding of the cultural dynamics that shape consumer behaviors, enabling them to tailor their strategies accordingly. To achieve these objectives, this study draws on data for national cultural dimensions of long-term orientation and indulgence from the Hofstede National Culture Index published by Greet Hofstede. Additionally, data on FinTech appetite is sourced from Google Trends, which measures the frequency of searches for FinTech-related terms during the investigation period.

The study employed a two-stage methodological approach, initially utilizing fixed effects estimation in a panel data context, followed by a cross-sectional analysis regressing the obtained fixed effects estimates on time-invariant country characteristics. This rigorous analytical framework yielded noteworthy findings regarding the cultural determinants of FinTech adoption in OECD countries during the period under examination. Specifically, the results elucidate a statistically significant negative association between the cultural dimension of indulgence and FinTech appetite. This finding suggests that societies characterized by higher levels of indulgence exhibit a diminished propensity for FinTech adoption. Conversely, the cultural aspect of long-term orientation demonstrated a negative, albeit statistically insignificant, impact on FinTech appetite. These results contribute to our understanding of the complex interplay between cultural factors and technological adoption in the financial sector, offering valuable insights for policymakers and industry stakeholders alike.

The organization of this article is as follows: Section 1 introduces the research topic, outlining its objectives and significance. Section 2 reviews the theoretical framework and empirical literature, providing evidence of a causal link between national culture and entrepreneurial intention. Section 3 details the data, empirical models, summary statistics, and the methodology employed in the study. Section 4 analyzes the impact of national culture on entrepreneurial intention, presenting the study’s key findings. Section 5 offers a discussion of the findings, while Section 6 concludes the article with final remarks and recommendations for future research.

2 Literature Review

The rapid growth of FinTech has transformed the global financial landscape, offering innovative solutions that disrupt traditional financial services. Understanding the factors that shape individuals’ attitudes and behaviors toward FinTech is essential for policymakers, financial institutions, and FinTech providers. One intriguing aspect is the influence of cultural orientations, particularly long-term orientation and indulgence, on individuals’ appetite for FinTech. This literature review examines existing research to explore how long-term oriented and indulgent cultures shape FinTech appetite in OECD countries.

In our initial examination, we engaged in a critical analysis of several prominent theories, frameworks, and models pertaining to national culture, including Hofstede’s National Culture Dimensions, Trompenaars’ National Culture Framework, Hall and Hall’s National Culture Model, and Lewis’ Model of National Culture. While these models provide valuable perspectives on comprehending cultural disparities and their implications for human conduct, they are not without their constraints. This deliberation has enabled us to discern the pertinent cultural dimensions that play a significant role in fostering the adoption of FinTech.

Hofstede’s national culture dimensions are widely recognized and frequently referenced when it comes to comprehending cultural differences among countries. Hofstede identified six cultural dimensions: power distance, individualism–collectivism, masculinity–femininity, uncertainty avoidance, long-term orientation, and indulgence versus restraint (Hofstede, 2011). These dimensions have been extensively employed to compare cultural disparities across nations and gain insights into how cultural values influence various facets of human behavior. Nevertheless, some scholars criticize Hofstede’s approach for oversimplifying complex cultural phenomena and categorizing national cultures into rigid classifications. Furthermore, researchers argue that Hofstede’s model has limited relevance in today’s globalized and interconnected world, where cultural boundaries are increasingly blurred (Shaiq et al., 2011).

Trompenaars’ national culture framework is another well-regarded model utilized to comprehend cultural differences across countries. This framework places emphasis on cultural values and norms that shape individual behavior and organizational practices (Moore, 2020). Trompenaars identified seven cultural dimensions, including universalism-particularism, individualism-communitarianism, specific-diffuse, neutral-affective, achievement-ascription, sequential-synchronic, and internal–external control (Trompenaars & Hampden-Turner, 2020). However, some scholars argue that Trompenaars’ approach is too static and deterministic, failing to account for the dynamic and fluid nature of cultural change. Additionally, researchers note that Trompenaars’ model primarily focuses on Western cultures and may not adequately apply to non-Western contexts (Lacerda, 2011).

Hall and Hall’s national culture model underscores the significance of context and nonverbal communication in comprehending cultural disparities among countries. This model emphasizes how different cultures interpret and respond to nonverbal cues, such as gestures, facial expressions, and tone of voice (Warner-Søderholm, 2013). Hall and Hall identified three cultural dimensions: high-context versus low-context communication, monochronic versus polychronic time, and high versus low-contact cultures (Hall, 1976). However, some scholars criticize Hall and Hall’s approach for focusing excessively on surface-level behaviors while overlooking deeper cultural values and beliefs. Additionally, researchers suggest that Hall and Hall’s model may only be applicable to certain cultures and may oversimplify complex cultural phenomena (Cardon, 2008).

Lewis’ model of national culture highlights the role of communication styles and patterns in shaping cultural differences among countries (Dunkel & Meierewert, 2004). This model categorizes cultures into three main groups: linear-active, multi-active, and reactive. Linear-active cultures prioritize schedules, deadlines, and task-oriented communication, whereas multi-active cultures emphasize interpersonal relationships and social interaction, and reactive cultures value harmony, respect, and conflict avoidance (Lewis, 2018). However, some scholars criticize Lewis’ model for oversimplifying intricate cultural phenomena and relying heavily on stereotypes and generalizations. Additionally, researchers note that Lewis’ model may not be universally applicable and may overlook the diversity and complexity of cultural values and beliefs (Niemi, 2019).

In conclusion, national culture theories, frameworks, and models provide valuable frameworks for comprehending cultural differences among countries. However, it is crucial to approach these models with a critical and nuanced perspective. National culture models should serve as a starting point for cross-cultural research rather than definitive and rigid frameworks for understanding cultural disparities. Researchers should be aware of the limitations and biases inherent in these models and strive to incorporate diverse perspectives and approaches to gain a comprehensive understanding of the complex and dynamic nature of cultural differences. Ultimately, adopting a holistic and nuanced approach to cross-cultural research can lead to a more accurate and comprehensive understanding of how cultural values and norms shape human behavior, including entrepreneurial activities, management practices, and decision-making.

Furthermore, this literature review explores the influence of long-term oriented and indulgent cultures on FinTech appetite in OECD countries. Long-term oriented cultures, characterized by a focus on future planning and sustainable growth, exhibit a positive relationship with FinTech adoption. These cultures prioritize efficiency and embrace technological advancements, making FinTech services appealing for their long-term benefits (Özbilen, 2017). Indulgent cultures, on the other hand, value immediate gratification and personal enjoyment, aligning well with the convenience and user-friendly nature of FinTech. They exhibit a higher propensity for experimentation and openness to new experiences, driving their adoption of FinTech solutions (Khan & Cox, 2017). However, it is important to consider contextual factors, such as regulatory frameworks, institutional support, and demographic characteristics, that may mediate or moderate these relationships. By understanding the cultural dynamics shaping FinTech appetite, policymakers, financial institutions, and FinTech providers can tailor their strategies to effectively engage with individuals in different cultural contexts.

3 Data and Estimation Strategy

In this section, we cover various aspects including data description, defining the empirical model, presenting summary statistics, and explaining the rationale behind the chosen estimation approach.

4 Results

Table 3 presents a detailed summary of the findings from the estimated equations, encompassing both the main model and the robustness checks. To account for substantial variations in sample size across observations, a two-stage fixed effects regression was applied, alongside robust techniques to address potential issues such as heteroscedasticity, autocorrelation, and cross-sectional dependence. Furthermore, additional control variables were introduced into the estimated model to enhance the robustness and reliability of the findings. The analysis is further supported by two additional assessments. These include a stratified analysis of OECD countries, segmented into two subgroups based on GDP levels (high and low to medium), and a modification of the fintech appetite proxy, substituting Google Trends with the UNCTAD E-commerce Index.

The results suggest that societies with higher levels of indulgence exhibit a lower inclination toward fintech engagement (coefficient estimate [CE]: −0.030, p-value: 0.000). In contrast, the cultural dimension of long-term orientation shows a negative but statistically insignificant effect on fintech appetite (CE: −0.005, p-value: 0.435). Notably, this effect remains consistent even after introducing additional control variables for validation. The outcomes of the two supplementary analyses will be discussed in the subsequent subsection.

5 Discussion of the Findings

The present study investigates the influence of cultural dimensions, specifically long-term orientation and indulgence, on FinTech appetite in OECD countries. Our findings reveal a complex interplay between these cultural factors and FinTech adoption, moderated by economic conditions.

Our main analysis indicates a significant negative causal relationship between indulgence and FinTech appetite, while long-term orientation shows a negative but statistically insignificant effect. These results suggest that societies characterized by higher levels of indulgence exhibit a lower propensity for FinTech adoption. This finding aligns with the cultural dimensions theory proposed by Hofstede et al. (2010), who posit that indulgent cultures prioritize immediate gratification and may be less inclined toward long-term financial planning. In the context of FinTech, which often requires users to adapt to new technologies and potentially delay immediate rewards for future benefits, this cultural trait may indeed act as a barrier to adoption.

The relationship between indulgence and technology adoption is complex and context-dependent. While some studies have suggested that indulgent cultures might be more open to new technologies due to their emphasis on enjoyment and personal gratification (Srite & Karahanna, 2006), our findings indicate that in the specific context of FinTech, the relationship is negative. This aligns with research by Faqih and Jaradat (2015), who found that the adoption of financial technologies involves a higher degree of perceived risk and complexity compared to other forms of technology adoption. Moreover, the negative relationship between indulgence and FinTech appetite is indicative of broader societal attitudes toward financial management. Chui and Kwok (2008) found that indulgent cultures tend to have lower savings rates and higher consumption levels. These cultural tendencies may naturally lead to less engagement with financial technologies that emphasize savings, investment, and long-term financial planning (Czarnecka and Schivinski, 2019).

The insignificant effect of long-term orientation in our main analysis initially appears counterintuitive, given that FinTech adoption often requires forward-thinking and investment in future capabilities. However, this result suggests that the relationship between long-term orientation and FinTech adoption may be influenced by other contextual factors not captured in the main analysis.

Furthermore, the varying effects of cultural dimensions across different economic contexts in our additional analysis underscores the importance of considering macroeconomic factors when examining FinTech appetite. This finding contributes to the growing body of literature on the contextual nature of technology adoption, as highlighted by Venkatesh and Zhang (2010), who emphasized the need for a more nuanced understanding of how cultural factors interact with environmental conditions to influence technology acceptance. Similarly, Zhao et al. (2015) argued that the impact of cultural dimensions on technology adoption is not uniform but rather moderated by environmental factors such as economic conditions and institutional frameworks.

Our findings have significant implications for both theory and practice. From a theoretical perspective, they contribute to the ongoing debate about the universality of cultural dimensions in predicting technology adoption. The varying effects of long-term orientation and indulgence across different economic contexts support the argument for a more nuanced, context-dependent approach to understanding cultural influences on technology adoption, as advocated by Srite and Karahanna (2006) and further developed by Caprar et al. (2015) in their review of cross-cultural organizational behavior.

6 Conclusion and Recommendations

This research investigated the relationship between cultural dimensions (long-term orientation and indulgence) and FinTech adoption across OECD countries, analyzing data from 43 nations over 2012–2020. The study employed Hofstede’s National Culture Index and Google Trends data, utilizing a multi-stage fixed effects model with robust standard errors.

Our findings reveal significant insights into the cultural dynamics of FinTech adoption. The main analysis demonstrated a consistent negative relationship between indulgence and FinTech appetite, indicating that highly indulgent societies show lower propensity for FinTech adoption. This aligns with Hofstede’s cultural dimensions theory, suggesting that cultures prioritizing immediate gratification may be less inclined toward financial technologies requiring longer-term adaptation and planning. The effect of long-term orientation proved more nuanced, varying across different economic contexts. This finding highlights the complex interplay between cultural dimensions and economic conditions in shaping FinTech adoption patterns. Our alternative proxy analysis using the UNCTAD E-commerce Index corroborated these findings, enhancing their robustness and extending their implications to the broader digital economy.

The implications of these findings are particularly relevant for various stakeholders in the FinTech ecosystem. For FinTech companies, the results suggest the critical importance of integrating cultural sensitivity into product design and user interfaces. Companies should consider tailoring their solutions to match the cultural values of their target markets, with particular attention to the balance between immediate benefits and long-term financial planning features. In high-indulgence societies, emphasis should be placed on immediate benefits and user-friendly interfaces, while solutions targeted at long-term oriented cultures should focus on stability and future financial benefits.

From a policy perspective, our findings underscore the need for culturally sensitive regulatory frameworks. Policymakers should consider implementing financial literacy programs, particularly in cultures with low long-term orientation, while creating regulatory sandbox environments that foster innovation while maintaining appropriate oversight. The research suggests that policy effectiveness may be enhanced through cross-border partnerships that facilitate knowledge sharing and the development of culturally appropriate regulatory approaches.

Marketing strategies in the FinTech sector should be carefully aligned with cultural values, as our findings indicate significant variations in technology adoption patterns across different cultural contexts. This necessitates a nuanced approach to communication, where messaging is tailored to resonate with local cultural values while maintaining the integrity of the financial products and services offered.

Future research directions emerging from this study suggest several promising avenues for investigation. Scholars should consider exploring additional cultural dimensions within Hofstede’s framework, as well as investigating alternative cultural models such as those proposed by Trompenaars and Hall and Hall. Furthermore, examining specific FinTech solutions such as mobile payments, robo-advisors, and peer-to-peer lending could provide more granular insights into the relationship between cultural dimensions and specific technological applications.

This research makes a significant contribution to the growing body of knowledge on cultural influences in FinTech adoption, offering both theoretical insights and practical implications for stakeholders across the FinTech ecosystem. The findings underscore the importance of considering both cultural and economic factors in developing and promoting FinTech solutions, suggesting that success in this sector requires a nuanced, context-dependent approach that respects and responds to cultural differences while adapting to varying economic conditions. The study’s results provide a foundation for understanding how cultural dimensions influence FinTech adoption, while also highlighting the need for continued research in this rapidly evolving field.