Impact of DigTech, FinTech, and RegTech on the Banking Industry

Abstract

This research work aims to examine the influence of financial technology (FinTech) companies over the traditional banking sector. FinTech is a digital financial solution offered to small businesses and individuals to meet their banking needs. FinTech companies are expected to be able to offer the same banking products as existing banks, but it is believed that FinTech company growth will accelerate faster in countries where digital technology is available. There were mentions that FinTech companies have had a financial impact on traditional banks' results. This research paper aims to determine whether there is enough empirical evidence to support these hypotheses. A study model was designed that identified the dependent and independent variables for each hypothesis. The research carried out to confirm this theory is drawn from the previous literature by academic authors. The research shows that FinTech startups will grow fastest in an environment where digital technology is available and mobile penetration is widespread. The results show that the profitability of traditional banks changes when FinTech companies are present in a country and when banks incorporate their financial technology into their business model. The results of the statistical analysis show that the influence of FinTech on the profitability of the banking sector is not statistically significant.