The Impact of FinTech on Traditional Banking: A Literature Review with a Focus on Morocco’s Financial Inclusion

Abstract

Financial technology (fintech) is a new challenger for traditional banking services. Notably, banks that have failed to adapt and incorporate new technologies in finance have faced stiff competition from digital banking, lending platforms, and digital payment solutions. This study focused on the impact of financial technology on traditional banking institutions and the challenges and opportunities presented by emerging digital financial solutions. The study sought to understand the extent of Fintech’s disruption in operation and the role of traditional banking systems. It delved into the emerging trends in finance, such as mobile banking, digital payment, and emerging solutions in lending. The study focused on fintech innovation in the Moroccan financial institutions. Fintech, like any other emerging technology, comes with its share of challenges. Regulatory concerns, competition between Fintech firms, and issues of cybersecurity in finance persist. This research assessed the transformative role of financial technology in banking and the overall financial inclusion. The methodology entails reviewing financial publications on the role of fintech in the traditional banking system, the World Bank and Morocco’s central bank reports, and other material from relevant sources such as the United Nations Development Program (UNDP), the United Nations Capital Development Fund (UNCDF), and industry experts. The findings emphasized the need for collaboration among financial institutions, policymakers, and fintech firms in sustaining an inclusive financial ecosystem.