THE EVOLUTION OF DIGITAL BANKING: THE ROLE OF FINTECH IN TRANSFORMING FINANCIAL SERVICES

Abstract

The rapid evolution of digital banking has fundamentally transformed the financial services landscape, driven significantly by the innovations of financial technology (FinTech). This review examines the pivotal role of FinTech in reshaping banking practices, customer experiences, and operational efficiency. By leveraging technologies such as artificial intelligence (AI), blockchain, and big data analytics, FinTech has redefined traditional banking paradigms, introducing a seamless, customer-centric approach. The study highlights key innovations in mobile banking, digital wallets, peer-to-peer lending, and robo-advisory services, demonstrating their impact on accessibility, speed, and transparency. Furthermore, the integration of FinTech has enabled banks to cater to underserved markets, promoting financial inclusion through digital solutions tailored to diverse customer needs. The paper explores the challenges of cybersecurity, data privacy, and regulatory compliance that accompany this transformation, emphasizing the need for robust frameworks to mitigate risks and enhance trust. Additionally, the research underscores the emergence of open banking and API-based ecosystems as catalysts for collaboration between traditional banks and FinTech startups. By analyzing case studies and global trends, the paper provides a comprehensive understanding of the opportunities and limitations of digital banking evolution. It concludes by envisioning the future trajectory of FinTech in driving sustainability, innovation, and inclusivity within the financial sector. This paper serves as a valuable resource for policymakers, financial institutions, and technology providers seeking to navigate the dynamic intersection of technology and finance. The findings contribute to ongoing discussions about leveraging FinTech to build resilient, customer-focused banking ecosystems in an increasingly digital world.