FINTECH 2

The Impacts of Fintech in the Financial Industry

Introduction
Financial Technology (fintech) has captured the attention of the global financial industry recently. Proponents of fintech are taking every measure to develop more advanced technologies and innovations to improve fintech and accommodate the financial industry more. On the other hand, those opposing the adoption of fintech in the financial industry argue that it creates more harm than benefits in the industry. Fintech supporters illustrate that it has brought many improvements in the financial industry by boosting efficiency, developing a better customer experience, easier access, and faster financial services. Data security, confidentiality, privacy, and disrupting the traditional financial model are still under discussion. The introduction of fintech in the financial industry has generated several impacts, some that are positive and others that are negative. Several financial institutions have shown the adoption of fintech, such as JP Morgan, which has invested in financial technology to cope with trends in the financial industry. This suggests that the impact of fintech has been felt in many regions, especially in the financial industry. However, the discussion on the effectiveness of adopting fintech in the financial industry has created heat with the debate taking two major divides; fintech promoting financial institutions, and the other is that fintech is choking the traditional financial providers. Supporters of fintech argue that fintech has created innovative financial products that have made it easy and faster to access financial services. On the other hand, those opposing fintech illustrate the threats to privacy and confidentiality caused by the introduction of fintech. Therefore, the impacts of fintech in the financial industry include positive and negative effects that influence the functioning of financial service providers and the industry.

Literature Review
Literature Review Preface
The introduction of fintech was contributed by the financial crisis in 2008. It was caused by the transition eminent in financial market participants to low-capital intensive business structures, which were modern and accommodated the modern market structures. This created the financial industry’s need for innovation and creativity, leading to new financial products representing the initial fintech companies. Current fintech is characterized by increased digital transformations attributed to a combination of technological advancements such as artificial intelligence, machine learning, robotization, blockchain, among other technological developments. Fintech has changed how traditional banking services are provided. Thus, in this paper, we shall examine the emergence of fintech, factors affecting its adoption in financial institutions, the pros and cons of fintech, the impacts of fintech, and the challenges facing fintech.