Public trust and policy innovation in digital pawn services: Strengthening inclusive finance through governance transformation

Abstract

Background: The rapid expansion of digital financial services has transformed governance practices in public financial institutions, creating new opportunities for financial inclusion while raising challenges related to trust and accountability. Digital pawn services represent an emerging yet underexplored area within this transformation. Methods: This study employs a qualitative policy analysis approach using document analysis and thematic analysis. Data were collected from policy documents, institutional reports, and academic literature related to digital governance, financial inclusion, and public trust. Findings: The findings reveal that policy innovation plays a critical role in enabling governance transformation in digital pawn services. This transformation enhances accessibility and efficiency, particularly for underserved populations. However, the effectiveness of digital financial services is strongly mediated by public trust, which is shaped by transparency, system reliability, and institutional credibility. Conclusion: Digital transformation in public financial institutions is not solely a technological process but a governance-driven strategy that requires alignment between innovation, regulation, and trust-building mechanisms to achieve inclusive financial outcomes. Novelty/Originality of this article: This study proposes a trust-mediated governance framework that integrates policy innovation, governance transformation, and public trust to explain how digital financial services contribute to financial inclusion, particularly within state-owned enterprise contexts.