The Evolution of Financial Technology in Banking: A PRISMA-Based Systematic Review of Functions and Emerging Challenges

Abstract

Background: The adoption of Financial Technology (FinTech) has revolutionised the banking sector through rapid digital transformation. However, current research often focuses narrowly on financial inclusion and technological acceptance, frequently overlooking critical social, managerial, and regulatory perspectives. This gap underscores the necessity for a comprehensive review of existing literature to clarify the evolving roles and challenges of FinTech in banking.

Objective: Utilising the Scopus database, this study provides an analytical synthesis of academic literature concerning the primary functions and systemic challenges of FinTech within the global banking sector.

Methodology: This research employed a qualitative systematic literature review (SLR) design. Scientific publications from the Scopus database spanning 2010–2025 were screened in accordance with the PRISMA protocol, resulting in 73 peer-reviewed publications for final analysis.

Results: The findings indicate that FinTech integration has significantly enhanced service delivery, increased operational efficiency, and accelerated the proliferation of digital payment ecosystems. Despite these advancements, the sector continues to grapple with complex issues related to risk management, corporate governance, and evolving regulatory frameworks. Notable contributions to this field are concentrated in journals focused on data science, economics, and electrical engineering.

Unique Contribution: This research presents a pioneering, comprehensive literature review that combines bibliometric and content analyses to provide an integrated overview of thematic trends in FinTech and banking. It specifically highlights the under-researched intersection of digital innovation and regulatory compliance.

Conclusion: FinTech adoption is a primary driver of modern banking success, streamlining payments and reducing overheads. Nonetheless, the industry remains burdened by legal and compliance hurdles, particularly in Islamic banking.

Key Recommendation: Future research should expand this SLR by integrating data from both Scopus and Web of Science (WoS). Furthermore, dedicated studies are required to explore FinTech governance within Islamic finance and the ethical implications of digital banking.