The Influence of Financial Technologies (Fintech) on Modern Banking: Analyzing Barriers, Cybersecurity, Regulatory Frameworks, and Their Effects on Financial Inclusion and Customer Experience in Pakistan

Abstract

This study investigates the impact of financial technologies (FinTech) on modern banking, focusing on barriers to adoption, cybersecurity concerns, regulatory frameworks, and their influence on financial inclusion and customer experience in Bannu, Khyber Pakhtunkhwa, Pakistan. Utilizing a sample of 200 banking employees and FinTech users, the research employs descriptive statistics, reliability analysis, correlation analysis, and hypothesis testing to explore the relationships between these variables. The results demonstrate a significant positive impact of regulatory frameworks, cybersecurity concerns, and barriers on the adoption of FinTech innovations. Furthermore, FinTech innovations were found to significantly enhance both financial inclusion (Beta = 0.50, p < 0.01) and customer experience (Beta = 0.55, p < 0.01), highlighting their potential to improve access to banking services in underdeveloped areas. The findings suggest that while barriers such as limited awareness and cybersecurity risks exist, the benefits of FinTech—particularly in terms of accessibility and customer satisfaction—are substantial. Policymakers and financial institutions are encouraged to develop strategies that address these barriers and enhance security measures to facilitate greater FinTech adoption. These results align with prior studies on the transformative role of FinTech in improving financial services, especially in under developed regions.

Keywords; Fintech, Cybersecurity, Regulatory frameworks, Cybersecurity risks.