Journal of Economics Intelligence And Technology

Abstract: The rapid proliferation of AI-driven decision systems in FinTech firms has fundamentally altered organisational governance; yet, the theoretical mechanisms linking algorithmic leadership to financial performance remain poorly understood. This conceptual paper develops an integrative framework explaining how algorithmic leadership transforms governance and influences financial performance in FinTech contexts. The paper draws on agency theory, the resource-based view, socio-technical systems theory and upper echelons theory, and combines the disparate literature on algorithmic management, AI governance, FinTech performance, and organisational governance. The framework suggests that algorithmic leadership characterised by algorithmic transparency, adaptive learning, predictive analytics, and decision automation has a positive effect on financial performance, this effect is mediated by the processual and structural governance changes, as well as the changes in the overall governance, (Proposition 2) (Proposition 1). Algorithmic leadership effectiveness is subject to the regulatory context, AI maturity and organisational culture (Proposition 3) and the performance outcome depends on the complementarity of humans and algorithms in governance processes (Proposition 4). The paper adds by adding agency theory concepts to algorithmic situations, revising socio-technical systems theory for algorithmic governance, establishing new conceptual language, and proposing testable propositions for future empirical research. The framework provides a practical approach to algorithmic governance issues for FinTech leaders, boards and regulators.