Exploring the Dynamics Between Fintech Firms and Traditional Banks: Competition, Collaboration and Service Gap Fulfillment
DOI:
https://doi.org/10.51137/wrp.ijarbm.462Keywords:
Fintechs, Traditional Banks, Financial Innovation, Banking Models, Financial TechnologyAbstract
The financial sector has undergone significant transformation due to the emergence of fintech firms offering innovative, technology-driven financial services. This development has disrupted traditional banking models and raised questions about the continued relevance of conventional banks in an increasingly fintech-oriented environment. This study investigates whether fintech firms primarily compete with, complement, or fill gaps left by traditional banks and examines the potential for their coexistence. Using a PRISMA-guided approach to source relevant literature from the Scopus database and applying thematic analysis, the study identifies key patterns in fintech–bank interactions. The findings reveal that fintech firms actively compete with traditional banks, often disrupting established business models. However, evidence also shows growing collaboration and complementarity between fintechs firms and traditional banks in certain economies, contributing to a more integrated financial ecosystem. Based on these insights, the study recommends the development of balanced regulatory frameworks that support financial innovation while safeguarding traditional institutions. Additionally, traditional banks are encouraged to adapt their business models and collaborate with fintech firms to deliver innovative products that meet evolving customer needs, thereby promoting stability, competitiveness, and financial inclusion.
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