Leveraging AI and Digital Skills for Sustainable Finance Effectiveness: Evidence from a Fintech Adoption Framework, Dr Khaled Alotaibi, Dr Manal Alduaij, Dr Fahad Alahmad, Prof. Bader AlShammari, Elbeyaly Nouran
Dr Khaled O. Alotaibi*
Management Department, College of Business Studies, Public Authority for Education and Training
Kuwait
ORCID: 0000-0003-3749-8431
Dr Manal Y. Alduaij
Management Department, College of Business Studies, Public Authority for Education and Training
Kuwait
ORCID: 0000-0003-0920-4432
Dr Fahad A. Alahmad
Management Department, College of Business Studies, Public Authority for Education and Training
Kuwait
ORCID: 0000-0003-0920-4432
Professor Bader A. AlShammari
Accounting Department, College of Business Studies, Public Authority for Education and Training
Kuwait
ORCID: 0000-0003-2625-6699
Elbeyaly Nouran
Business Department, Kuwait Technical College
Kuwait
ORCID: 0009-0004-3021-0268
Background: The integration of artificial intelligence (AI) and digital literacy into financial systems offers significant potential for advancing sustainable finance, particularly in emerging economies. However, limited empirical research has examined how these digital enablers influence Environmental, Social, and Governance (ESG) outcomes.
Objectives: This study examines the influence of AI readiness and digital literacy on the effectiveness of sustainable finance (SFE) among financial professionals in Kuwait, utilizing the Technology-Organization-Environment (TOE) and Resource-Based View (RBV) frameworks.
Methods: A cross-sectional survey was administered to 239 professionals from Islamic and conventional banks. Structural Equation Modeling (SEM) using SmartPLS was employed to test direct and mediated relationships among AI readiness, digital literacy, and SFE. Reliability, validity, and model fit were assessed using established benchmarks.
Results: AI readiness had a significant influence on both digital literacy (β = 0.759, p < .001) and SFE (β = 0.718, p < .001). Digital literacy also directly affected SFE (β = 0.225, p < .001) and mediated the relationship between AI readiness and SFE (indirect β = 0.171, p < .001). The model demonstrated excellent fit (CFI = 0.984, RMSEA = 0.0369).
Conclusions: Findings highlight the strategic value of aligning AI infrastructure with digital competency development to enhance ESG performance. For public institutions in developing economies, a dual investment in technology and workforce upskilling is crucial for the effective and sustainable implementation of finance.
Keywords: AI Readiness, Digital Literacy, Sustainable Finance, ESG, Kuwait.