THE ROLE OF FINANCIAL TECHNOLOGY IN TRANSFORMING THE INDIAN BANKING SECTOR

Abstract

Financial Technology (FinTech) has emerged as a major force transforming the Indian banking sector by introducing innovative digital solutions for payments, lending, customer service, risk management and financial inclusion. The rapid development of mobile banking, digital payments, artificial intelligence, blockchain, biometric authentication and cloud-based banking systems has changed the way customers interact with banks and financial institutions. The present study examines the role of FinTech in transforming the Indian banking sector, with particular emphasis on digital banking convenience, technological efficiency, financial inclusion and customer experience. The study also examines challenges associated with FinTech adoption, including cybersecurity, data privacy, technological complexity and digital literacy. A descriptive and analytical research design was adopted for the study. Primary data were collected from 347 respondents through a structured questionnaire. Exploratory Factor Analysis was used to identify the underlying dimensions of FinTech adoption, while Structural Equation Modelling (SEM) using AMOS was proposed to examine the relationship between FinTech adoption and banking-sector transformation. The findings indicate that digital banking convenience, technological efficiency and financial inclusion positively contribute to banking transformation, while perceived technological and security challenges may act as barriers to effective adoption. The study recommends strengthening digital infrastructure, cybersecurity, customer awareness, employee training and regulatory mechanisms to ensure sustainable FinTech-driven transformation of the Indian banking sector.