Financial institutions operate within an increasingly complex digital environment, shaped by rapidly evolving regulatory frameworks, heightened geopolitical uncertainty, and accelerated technological innovation. Digital transformation is impacted by the exogenous factors such as shocks or crisis such as the COVID-19 pandemic, inflation surges, [1] etc., as well as prevailing narratives surrounding technologies like artificial intelligence (AI), blockchain, and digital platforms [2]. However, with ever-evolving technology, in the end it is firms’ strategic decision to adopt ICT and innovation. In line with Romer’s endogenous growth theory (EGT), the technological investment of the banks is a deliberate strategic decision to support the growth [3]. This paper aims to analyze how strategic decisions are made and what is the underlying model or theory. The object of this research is the technology adoption process in European financial institutions; the subject of the research is the key decision-making endogenous factors. The study contributes to unexplored interconnection of Endogenous technological change theory and microeconomic dynamics of the European financial system.