The Role of Digital Financial Services, Consumer Trust, and Institutional Quality in Driving Firm Growth in Nigeria

Abstract

Purpose
This study examines the impact of digital financial services (DFS) adoption—specifically mobile banking, FinTech platforms, and digital wallets—on consumer trust and firm growth in Nigeria. It develops a conceptual framework linking DFS adoption, consumer trust, and firm performance, while considering the moderating roles of institutional quality and digital infrastructure.

Methodology
The study employs empirical models based on simulated firm-level panel data to analyze the relationships among DFS adoption, consumer trust, and firm growth. Moderation and mediation effects are incorporated to capture the influence of institutional quality and ICT infrastructure on these relationships.

Findings
The results indicate that DFS adoption has a significant positive effect on firm growth, with consumer trust serving as a key mediating factor. Moreover, higher institutional quality and better digital infrastructure strengthen the positive impact of DFS adoption on firm performance.

Conclusion
The study contributes to the literature on digital transformation in emerging economies by highlighting the synergistic role of technology, trust, and institutions in enhancing firm growth. It underscores the need for policymakers to strengthen consumer protection, promote financial literacy, and invest in digital infrastructure, while firms should prioritize trust-building strategies alongside digital innovation to achieve sustainable growth.