Rise of Fintech in Banking: Impact of Technology on Traditional Financial Services in India

Abstract

This research investigates the transformative effects of FinTech on traditional banking, highlighting key areas such as adoption rates, customer interaction, operational efficiency, and associated risks. The study reveals a rapid increase in FinTech adoption among banks, with 80% of traditional banks integrating these technologies by 2020, up from 25% in 2015. This shift has significantly altered customer interaction channels, with 65% of customers now using digital banking platforms and 25% opting for mobile banking, leaving only 10% reliant on physical branches. The adoption of FinTech has also driven notable efficiency improvements, with banks achieving a 45% increase in operational efficiency and a 35% reduction in costs by 2020, largely due to the implementation of automation and AI. However, these advancements come with challenges, particularly in cybersecurity, where 40% of banks report significant threats, followed by regulatory compliance concerns at 30%. The findings indicate that while FinTech adoption enhances efficiency and customer engagement, it necessitates robust strategies to mitigate cybersecurity risks and navigate regulatory complexities. This research contributes to the broader understanding of the interplay between FinTech and traditional banking, offering valuable insights for financial institutions undergoing digital transformation.