Fintech Adoption in India’s Financial Services Sector: A Systematic Review of Financial Performance Implications
DOI:
https://doi.org/10.66635/7xjcy422Keywords:
FinTech Adoption, Financial Performance, Operational Efficiency, Financial Inclusion, IndiaAbstract
This study examines the impact of FinTech adoption on financial performance in India’s financial services sector through a systematic literature review (SLR). Using the PRISMA 2020 framework, relevant studies were identified from major academic databases and screened based on predefined inclusion and exclusion criteria, resulting in a final sample of 15 studies for qualitative synthesis. The analysis reveals that FinTech adoption has significantly transformed financial services by enhancing operational efficiency, reducing transaction costs, and improving service delivery through technologies such as artificial intelligence, blockchain, and digital platforms. The findings indicate a generally positive relationship between FinTech adoption and financial performance, particularly in terms of profitability, productivity, and cost efficiency, although short-term challenges may arise due to initial investment and integration costs. Furthermore, FinTech plays a critical role in promoting financial inclusion by expanding access to financial services for underserved populations and small and medium enterprises, thereby supporting entrepreneurial growth and inclusive economic development. The study also highlights the role of FinTech in strengthening risk management through data-driven decision-making and fraud detection mechanisms. However, challenges such as cybersecurity risks, regulatory constraints, and technological disparities remain significant barriers. Overall, the study provides a structured synthesis of existing literature and offers insights for policymakers, practitioners, and researchers on the sustainable adoption of FinTech in emerging economies.
References
1.Arner, D. W., Barberis, J., & Buckley, R. P. (2015). The evolution of Fintech: A new post-crisis paradigm. Geo. J. Int'l L., 47, 1271.
2.Buchak, G., Matvos, G., Piskorski, T., & Seru, A. (2018). Fintech, regulatory arbitrage, and the rise of shadow banks. Journal of financial economics, 130(3), 453-483.
3.Gomber, P., Koch, J. A., & Siering, M. (2017). Digital Finance and FinTech: current research and future research directions. Journal of business economics, 87(5), 537-580.
4.Gomber, P., Kauffman, R. J., Parker, C., & Weber, B. W. (2018). On the fintech revolution: Interpreting the forces of innovation, disruption, and transformation in financial services. Journal of management information systems, 35(1), 220-265.
5.Haddad, C., & Hornuf, L. (2019). The emergence of the global fintech market: Economic and technological determinants. Small business economics, 53(1), 81-105.
6.Hornuf, L., & Schwienbacher, A. (2017). Should securities regulation promote equity crowdfunding?. Small Business Economics, 49(3), 579-593.
7.Jagtiani, J., & Lemieux, C. (2018). Do fintech lenders penetrate areas that are underserved by traditional banks?. Journal of Economics and Business, 100, 43-54.
8.Lee, I., & Shin, Y. J. (2018). Fintech: Ecosystem, business models, investment decisions, and challenges. Business horizons, 61(1), 35-46.
9.Schueffel, P. (2016). Taming the beast: A scientific definition of fintech. Journal of innovation management, 4(4), 32-54.
10.Thakor, A. V. (2020). Fintech and banking: What do we know?. Journal of financial intermediation, 41, 100833.
11.Vives, X. (2019). Digital disruption in banking. Annual Review of Financial Economics, 11(1), 243-272.
12.Philippon, T. (2016). The fintech opportunity (No. w22476). National Bureau of Economic Research.
13.Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa istanbul review, 18(4), 329-340.
14.Gai, K., Qiu, M., & Sun, X. (2018). A survey on FinTech. Journal of network and computer applications, 103, 262-273.
15.Alt, R., Beck, R., & Smits, M. T. (2018). FinTech and the transformation of the financial industry. Electronic markets, 28(3), 235-243.
16.Alalwan, A. A., Dwivedi, Y. K., & Rana, N. P. (2017). Factors influencing adoption of mobile banking by Jordanian bank customers: Extending UTAUT2 with trust. International journal of information management, 37(3), 99-110.
17.Belanche, D., Casaló, L. V., & Flavián, C. (2019). Artificial Intelligence in FinTech: understanding robo-advisors adoption among customers. Industrial Management & Data Systems, 119(7), 1411-1430.
18.Chen, M. A., Wu, Q., & Yang, B. (2019). How valuable is FinTech innovation?. The Review of financial studies, 32(5), 2062-2106.
19.Das, S. R. (2019). The future of fintech. Financial management, 48(4), 981-1007.
20.Dwivedi, Y. K., Hughes, L., Ismagilova, E., Aarts, G., Coombs, C., Crick, T., ... & Williams, M. D. (2021). Artificial Intelligence (AI): Multidisciplinary perspectives on emerging challenges, opportunities, and agenda for research, practice and policy. International journal of information management, 57, 101994.
21.Frost, J., Gambacorta, L., Huang, Y., Shin, H. S., & Zbinden, P. (2019). BigTech and the changing structure of financial intermediation. Economic policy, 34(100), 761-799.
22.Jünger, M., & Mietzner, M. (2020). Banking goes digital: The adoption of FinTech services by German households. Finance Research Letters, 34, 101260.
23.Li, Y., Spigt, R., & Swinkels, L. (2017). The impact of FinTech start-ups on incumbent retail banks’ share prices. Financial Innovation, 3(1), 26.
24.Puschmann, T., & Alt, R. (2016). Sharing economy. Business & information systems engineering, 58(1), 93-99.
25.Varga, D. (2017). Fintech, the new era of financial services. Vezetéstudomány-Budapest Management Review, 48(11), 22-32.
26.Wang, Y., Xiuping, S., & Zhang, Q. (2021). Can fintech improve the efficiency of commercial banks?—An analysis based on big data. Research in international business and finance, 55, 101338.
27.Zetzsche, D. A., Buckley, R. P., Barberis, J. N., & Arner, D. W. (2017). Regulating a revolution: From regulatory sandboxes to smart regulation. Fordham J. Corp. & Fin. L., 23, 31.
