The Digital Heir: How Next-Generation Successors Experience AI- and FinTech-Enabled Succession in Family Firms

Abstract

This study examines how next-generation successors experience AI and FinTech-enabled succession in Pakistani family firms. The study is grounded in Interpretative Phenomenological Analysis, with eight semi-structured interviews conducted with second- and third-generation successors across various sectors. The finding reveals three different developmental patterns: evidence-based legitimisation, governance-based integration, and relationally contested recognition. Transitions became more credible because of small digital pilots, measurable results and trusted digital intermediaries, and more successful when digital initiatives were part of formal governance, decision rights were documented, and there was shared accountability. When succession was unclear, digitalisation further exacerbated the intrusion of the incumbent, family dynamics, and the precarious legitimacy of the ruling elites. The study shows that AI and FinTech are not merely operational tools but mechanisms through which authority, trust, continuity, and leadership identity are negotiated. The study contributes to the family business literature by introducing the concept of authority-gated capability development and by showing how socioeconomic wealth can be limiting and facilitating the process of digital transformation in intergenerational succession. These insights guide management of digitally enabled leadership transitions.

Article Classification: M10, M12, M14.

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