FINTECH AND FINANCIAL INSTITUTIONS

Abstract

The growth of financial technology (FinTech) companies over the preceding ten years is evident in the evolution of digital innovation. Fintech ideas have just recently started to gain acceptance from traditional players in the financial sector (financial institutions, for instance). Notwithstanding recent bank acquisitions of FinTech companies, the majority of FinTech enterprises are self-funded and open to outside banks. FinTech companies have the potential to take over many crucial tasks currently carried out by traditional banks, in part because many banks, aside from the well-known huge ones, continue to offer outdated, exorbitantly expensive, and bureaucratic financial services. Simply put, it is anticipated that FinTech companies will have a substitution impact, causing banks to forsake certain forms of economic activity. In response to Fintech advances, a bank's incentives to take chances and improve its effectiveness and profitability may have changed. This demonstrates how fintech developments will impact bank risk, effectiveness, and profitability because they present a viable alternative to traditional banks as a source of credit. This study aims to investigate the difficulties from a global perspective.