Dr. NGP arts and science college
This study focuses on the emergence of FinTech has revolutionized the banking industry, posing significant challenges to traditional banking models. The study examines how respondents to use fintech services and analysis examines the impact of FinTech on traditional banking, exploring both the benefits and drawbacks using a sample of 120 respondents. We identify key areas of disruption, including changes in customer behavior, increased competition, and innovative payment systems. Our findings suggest that FinTech has improved financial inclusion, enhanced customer experiences, and increased efficiency. However, traditional banks face significant challenges in adapting to these changes, including the need for technological upgrades, cultural shifts, and strategic reorientation.
The financial services industry has undergone a significant transformation in recent years, driven by the rapid growth of financial technology (fin-tech). Fintech, which refers to the use of technology to improve and automate financial services, has disrupted traditional banking models and forced banks to rethink their strategies. The rise of fintech has led to the emergence of new players in the financial services industry, including digital-only banks, peer-to-peer lenders, and mobile payment providers. These new entrants have leveraged technology to offer faster, cheaper, and more convenient financial services, attracting a growing share of customers away from traditional banks.
1.1 Statement of The Problem
The widespread adoption of mobile banking has led to a shift away from traditional banking services, but also raises concerns about data protection and securities. Despite the benefits of internet banking, customers are increasingly concerned about security risks and technical issues, which can impact customer compliance and feedback. The growing demand for digital banking services has created new challenges for banks in terms of infrastructure costs and regulatory compliance, which can impact the overall customer experience.
1.3 Hypothesis of The Study
The adoption of Fintech services will lead to a significant decrease in the usage of traditional banking services. The rise of Fintech will lead to increased competition in the banking industry, resulting in better services and lower fees for customers. The adoption of Fintech services will lead to an increase in the risk of cybersecurity breaches and data theft in the banking industry.
1.4 Scope of The Study
This study investigates the operational changes and challenges faced by traditional banks in response to Fintech, including the need for digital transformation, cultural shifts, and talent acquisition. It examines the impact of Fintech on traditional banking operations, including changes in customer service, risk management, and compliance.
OBJECTIVE OF THE STUDY
RESEARCH METHODOLOGY
The research anticipates uncovering significant insights into the ways Fintech is impacting traditional banking. Potential findings may include shifts in customer preferences, changes in revenue streams, and the effectiveness of digital strategies in retaining market share.
1.7 Sample Design
Randomly select 120 traditional bank customers, aged 18-55 above, with 75% using finTech services. stratify by age, income, and banking frequency to ensure representative sample. Use online surveys and interview to collect data on finTech adoption and banking habits
1.8 Sampling Methods
Random Sampling in Fintech-Banking Research: Selecting a representative subset of bank customers or fintech users randomly, ensuring unbiased data. This method helps analyze the impact of fintech on traditional banking.
1.9 Statistical Tools Used
1.10 Data Collection
A questionnaire will be used to gather information from 120 participants. To analyze FinTech's impact on traditional banking through surveys, interviews, and customer satisfaction, and loyalty, to inform strategic decisions and innovation.
LIMITATIONS OF THE STUDY
REVIEW OF LITERATURE:
Ozdemir, Z., & Tarman, B. (2021) - Ozdemir and Tarman explore how fintech is reshaping financial services, discussing emerging business models, digital banking trends, and customer behaviors. They focus on the challenges faced by both fintech startups and legacy financial institutions in responding to digital transformation and the growing demand for tech-driven solutions.
Sullivan, R. (2020) - Sullivan’s study examines blockchain technology as a disruptive force within the fintech landscape. The author explores how blockchain enables decentralized financial services and eliminates traditional intermediaries, discussing its potential to enhance transparency, reduce costs, and streamline financial processes in areas like payments and contracts.
Luo, X., & Ba, S. (2020) - Luo and Ba investigate how fintech is improving financial accessibility, particularly for low-income and underserved populations. Their work highlights fintech platforms offering microloans, mobile payments, and insurance as essential tools for financial inclusion, especially in emerging markets where traditional financial infrastructure is lacking.
Frost, J., & Palomba, L. (2020) - Frost and Palomba analyze the impact of fintech in emerging markets, examining both the opportunities and challenges fintech presents. They discuss how fintech helps overcome barriers in access to finance, particularly in regions with limited banking infrastructure, while also exploring regulatory and economic challenges faced by startups.
Despite the growing importance of Fintech, there is a lack of comprehensive studies examining its impact on traditional banking business models, customer behavior, and regulatory frameworks. Existing research focuses on specific aspects, such as mobile payments or blockchain, but a holistic understanding of Fintech's effects on traditional banking is still missing, creating a significant research gap.
ANALYSIS
3.1percentage Analysis
Table. The Usage of Fintech Services of The Respondents
|
S.No |
Status of Usage |
No.Of Respondents |
Percentage |
|
1 |
Daily user |
36 |
30% |
|
2 |
Weekly user |
41 |
35% |
|
3 |
Monthly user |
37 |
30% |
|
4 |
Yearly user |
6 |
5% |
|
|
Total |
120 |
100% |
Source: Primary data
Interpretation
From the above table reveals that 30% of the respondents are using as a daily user, 35% of the respondents are weekly user, 30% of the respondents are monthly user,5% of respondents are yearly user.
Hence majority (35%) of respondents are using as a monthly user.
3.2 Chi-Square
Table No. Over All Satisfaction with Fintech And Traditional Banking of The Respondents
|
|
Cases |
|||||
|
Valid |
Missing |
Total |
||||
|
N |
Percent |
N |
Percent |
N |
Percent |
|
|
fintech services * traditional services |
120 |
100.0% |
0 |
0.0% |
120 |
100.0% |
Crosstab
|
fintech services * traditional services Crosstabulation |
||||||||
|
|
traditional services |
Total |
||||||
|
very satisfied |
somewhat satisfied |
neutral |
Somewhat satisfied |
dissatisfied |
||||
|
fintech services |
very satisfied |
Count |
24 |
0 |
0 |
0 |
0 |
24 |
|
Expected Count |
4.8 |
4.8 |
4.8 |
4.8 |
4.8 |
24.0 |
||
|
somewhat satisfied |
Count |
0 |
24 |
0 |
0 |
0 |
24 |
|
|
Expected Count |
4.8 |
4.8 |
4.8 |
4.8 |
4.8 |
24.0 |
||
|
neutral |
Count |
0 |
0 |
24 |
0 |
0 |
24 |
|
|
Expected Count |
4.8 |
4.8 |
4.8 |
4.8 |
4.8 |
24.0 |
||
|
somewhat satisfied |
Count |
0 |
0 |
0 |
24 |
0 |
24 |
|
|
Expected Count |
4.8 |
4.8 |
4.8 |
4.8 |
4.8 |
24.0 |
||
|
dissatisfied |
Count |
0 |
0 |
0 |
0 |
24 |
24 |
|
|
Expected Count |
4.8 |
4.8 |
4.8 |
4.8 |
4.8 |
24.0 |
||
|
Total |
Count |
24 |
24 |
24 |
24 |
24 |
120 |
|
|
Expected Count |
24.0 |
24.0 |
24.0 |
24.0 |
24.0 |
120.0 |
||
|
Chi-Square Tests |
|||
|
|
Value |
df |
Asymptotic Significance (2-sided) |
|
Pearson Chi-Square |
480.000a |
16 |
.010 |
|
Likelihood Ratio |
386.265 |
16 |
.015 |
|
Linear-by-Linear Association |
119.000 |
1 |
.002 |
|
N of Valid Cases |
120 |
|
|
|
a. 25 cells (100.0%) have expected count less than 5. The minimum expected count is 4.80. |
|||
Interpretation
The above table shows there is no significant relationship between fintech services and traditional banking services. The respondents have a significant value of .0.10 which is more than 0.05. this shows it is a null hypothesis
3.3percentage Analysis
Majority (55%) of the respondents are male.
Majority (42%) of the respondents are in the age of 18-25 Years.
Majority (60%) of the respondents are unmarried.
Majority of (31%) of the respondents are uneducated.
Majority (36%) of the respondents are earning monthly income of above Rs20,000 – Rs49,00,00
Majority (35%) of respondents are using as a monthly user.
Majority (49%) of the respondents are using as a traditional banking service in savings account.
Majority (82%) of the respondents are says Yes to using fintech Services.
Majority (86%) of the respondents are using fintech Services in mobile payments.
Majority (53%) of the respondents are says that significant change in banking habits.
Majority (70%) of the respondents are to prefer fintech Services.
Majority (62%) of the respondents are says that Fintech Services are benefits .
Majority 85% of the respondents are very satisfied in fintech Services
The respondents have a significant.value of .010 which is more than 0.05 Services.
Majority (43%) of the respondents are neutral in security and personal and financial information in using fintech value of .010 which is more than 0.05 Services.
Majority 85% of the respondents are chosen very concerned in security personal information in using traditional banking service.
Majority (72%) of the respondents are says trust in fintech Services that yes
Majority (88%) of the respondents are says yes used to future.
Majority (38%) of the respondents are says that usingonGoogle pay.
3.4 Chi-Square
There is no significant relationship between fintech services and traditional banking services. The respondents have a significant value of .0.10 which is more than 0.05. this shows it is a null hypothesis
CONCLUSION
FinTech offers benefits like increased efficiency, convenience, and financial inclusion. However, challenges include regulatory uncertainty, cybersecurity risks, and job displacement. To harness FinTech's potential, a balanced approach addressing these challenges is necessary. Mobile banking has transformed traditional banking by offering convenience, speed, and accessibility. It has increased customer engagement, reduced costs, and improved service delivery. However, traditional banks must adapt to changing customer expectations and invest in digital infrastructure to remain competitive. Data protection and security are critical concerns as FinTech continues to disrupt traditional banking. With the rise of digital platforms and mobile banking, ensuring the safety of sensitive customer information has become a top priority. Banks must implement robust cybersecurity protocols, such as encryption and multi-factor authentication, to protect against data breaches and fraud. Additionally, adherence to privacy regulations and data protection laws is essential for maintaining customer trust and complying with legal standards. Effective security measures are vital for sustaining growth in the FinTech industry.
REFERENCE
Dr. R. Chandhrasekaran*, Mathumitha S., Analyze the Impact of Fintech on Traditional Banking, Int. J. Sci. R. Tech., 2025, 2 (3), 505-509. https://doi.org/10.5281/zenodo.15090177
10.5281/zenodo.15090177
