Is Fintech Just an Innovation? Impact, Current Practices, and Policy Implications of Fintech Disruptions

Abstract

FinTech has successfully challenged the established finance landscape and diversified its entry into socio-economic and sustainable platforms. On the contrary, it poses significant security, legislative, and law enforcement issues and may amplify the potential for fierce rivalry in the financial system. This study has identified four broader applications of FinTech that drive widespread FinTech adoption: banking, financial inclusion, regulation, and sustainability. The paperhas discussed the multifaceted impact of FinTech, analyzed current technologies, and trends shaping FinTech and examined the policy implications in each of the keyareas. We explored research articles and employed a narrative perspective. FinTech has broken down barriers for marginalized, unbanked populations through more accessible digital credit and leveraged the technological infrastructure for a smooth transition to a low-carbon economy. Adopting innovative technologies such as crowdfunding, big data analytics, blockchain, and artificial intelligence have established strategic decentralization and sped up ecological transition. However, since unregulated FinTech use can worsen existing financial problems and create more information asymmetry, establishing a regulatory framework with proper supervision that prioritizes client interests, data privacy, and risk management is crucial. As more and more financial institutions embrace the digital revolution, we anticipate a lot of positive outcomes, such as balanced regulation, an improved sustainable financing environment, and greater access to financial services for everyone.