Role of Fintech Adoption on Effective Functioning of Financial Institutions: An Empirical Study

Abstract

This empirical study looks into the role of Fintech adoption in the effective functioning of financial institutions, highlighting its impact on operational efficiency, financial inclusion, risk management, regulatory challenges, employment, partnerships, data privacy, resilience, consumer behaviour, global financial inclusion, and alignment with environmental, social, and governance (ESG) principles. Fintech's ability to streamline processes, reduce errors, and enhance security is evident, presenting financial institutions with new levels of efficiency. The adoption of Fintech has played an important role in promoting financial inclusion, particularly in Africa and Asia-Pacific regions, transcending geographical barriers and developing economic growth. However, it introduces challenges in risk management and cybersecurity, necessitating a balance between innovation and risk mitigation. Study survey was conducted among 262 respondents from different financial institutions to know the role of Fintech adoption on effective functioning of financial institutions and found that Risk Management, Automation and Digitalization, Enhanced Customer Experience and Cost Reduction are the factors that shows different role of Fintech adoption on effective functioning of financial institutions.