FinTech Innovation in the Financial Services Industry: A Systematic Review of Trends, Challenges, and Future Directions

Abstract

The financial services industry is undergoing a paradigm shift driven by rapid advances in Financial Technology (FinTech). This study presents a PRISMA-guided systematic literature review of FinTech innovation, synthesizing evidence from 39 peer-reviewed journal articles and five authoritative industry reports published between 2015 and 2025. The review examines dominant technological trends, adoption drivers, structural challenges, and future strategic directions shaping FinTech-enabled financial services. Findings indicate that digital payments, artificial intelligence, blockchain, open banking, and embedded finance have significantly enhanced efficiency, accessibility, and customer-centricity across banking, insurance, and investment services. However, persistent challenges related to regulatory uncertainty, cybersecurity risks, talent shortages, and digital exclusion continue to constrain sustainable adoption. The study further highlights India’s emergence as a global FinTech leader, supported by proactive policy frameworks and robust digital infrastructure. By integrating technological, institutional, and strategic perspectives, this review provides actionable insights for policymakers, practitioners, and researchers seeking to advance inclusive and resilient FinTech ecosystems. The review protocol followed PRISMA 2020 guidelines to ensure transparency, methodological rigor, and reproducibility in article identification, screening, and inclusion.