Digital Banking and Fintech Disruption: A Systematic Review of Financial Innovation

Abstract

This systematic review synthesizes research on digital banking and fintech-driven disruption in financial services, covering literature from last 15 years. Using Scopus, Web of Science, SSRN, ScienceDirect, and Google Scholar, we identified multiple high-quality studies examining technology enablers, business-model innovations, incumbent responses, regulatory implications, and market outcomes. Key technological drivers include AI, blockchain, open APIs, and mobile platforms. Business-model innovations range from neobanks and P2P lending to digital wallets and marketplace lending. Evidence shows that incumbents often co-evolve with fintech through partnerships, acquisitions, and digital transformation initiatives, rather than being wholly displaced. Regulatory frameworks and financial inclusion efforts significantly shape adoption and impact, while algorithmic risks and infrastructure gaps pose challenges. Methodological gaps persist, notably the scarcity of longitudinal, causal, and cross-country studies. We conclude with a research agenda emphasizing causal evaluation, interdisciplinary approaches, and policy-oriented insights to guide academics, practitioners, and regulators navigating ongoing digital transformation in financial services.