The Role of Fintech in Disrupting Traditional Banking Systems: Opportunities and Challenges

Abstract

The growth of FinTech (Financial Technology) is transforming conventional banking systems globally. As technology progresses and digital platforms become increasingly popular, financial services are being delivered in innovative ways that challenge traditional banking operations. This paper seeks to investigate the influence of FinTech on traditional banks, highlighting both its advantages and hurdles. One significant advantage offered by FinTech is enhanced efficiency and convenience for users. Numerous FinTech firms provide products and services accessible through digital channels, removing the necessity for in-person visits to branches or extensive paperwork. This not only saves customers time but also lowers expenses for both clients and banks. Furthermore, advancements in data analysis techniques enable FinTech to offer more personalized financial solutions tailored to individual customer requirements. Another notable effect of FinTech is the heightened competition within the banking sector. Established banks are encountering stiff competition from new digital-only providers that can deliver comparable, or even superior, services at lower prices due to their more flexible business structures. This compels traditional banks to quickly adapt and innovate to stay relevant in the current marketplace. Nevertheless, these opportunities also present several challenges that must be tackled by regulators and the businesses themselves. Nevertheless, with these prospects arise numerous challenges that need to be tackled by both regulatory bodies and the businesses involved.