FinTech Revolution and the Future of Financial Intermediation: A Systematic Review

Abstract

The rapid evolution of financial technology (FinTech) has significantly transformed the structure and function of financial intermediation, reshaping how financial services are delivered, accessed, and regulated. This systematic review examines the FinTech revolution and its implications for the future of financial intermediation by synthesizing findings from recent scholarly literature, industry reports, and policy analyses. The study explores key dimensions of FinTech innovation, including digital lending platforms, peer-to-peer (P2P) lending, blockchain-based financial services, robo-advisory systems, mobile payments, and decentralized finance (DeFi). Findings indicate that FinTech has enhanced efficiency, reduced transaction costs, improved financial inclusion, and increased competition within the financial sector by disintermediating traditional financial institutions in several service areas. However, the review also identifies persistent challenges, including regulatory uncertainty, cybersecurity risks, data privacy concerns, and systemic vulnerabilities associated with digital financial ecosystems. The analysis further highlights a gradual shift from traditional bank-centered intermediation toward hybrid financial ecosystems characterized by collaboration between banks, FinTech firms, and BigTech companies. The study concludes that while FinTech is redefining the role of financial intermediaries, it is unlikely to eliminate them entirely; rather, it is driving their transformation into more technology-enabled, platform-based entities. The review contributes to ongoing debates on financial innovation by providing an integrated understanding of emerging trends and their implications for policy, regulation, and financial stability.