The rise of digital technology has caused a fundamental shift in the modern financial landscape. Digital finance has occurred as a transformative force, driven by a set of key drivers. The present study explores the key drivers of digital finance in India through the “Interpretive Structural Modelling” (ISM) technique and “MICMAC” analysis. These techniques are utilized to analyze the relationships between the eleven key drivers of digital finance that have been recognized by the review of literature and to originate a hierarchical framework of the identified drivers. This is empirical research in which, with the help of experts’ knowledge, ISM forms a systematic hierarchical structure for the variables as the key drivers of digital finance. The research findings illustrated that AI & machine learning, blockchain technology, digital innovation, and digital literacy are the pillars of the ISM framework, and financial inclusion is the utmost important driver of digital finance in banks. This research offers useful recommendations to the stakeholders of the financial markets to boost the development and application of digital finance, thereby ultimately leading to the creation of a more secure, efficient, and inclusive financial environment.