FinTech Adoption and Profitability of Commercial Banks in India

Abstract

The rapid growth of Financial Technology (FinTech) has significantly transformed the operational efficiency and service delivery of commercial banks in India. Digital banking platforms, mobile applications, UPI, artificial intelligence, and data analytics have reshaped the traditional banking model. This study empirically examines the impact of FinTech adoption on the profitability of commercial banks in India using secondary data from 2019–20 to 2023–24. The study employs Return on Assets (ROA) and Return on Equity (ROE) as key profitability indicators and a Digital Transactions Index as a proxy for FinTech adoption. Descriptive statistics, trend analysis, correlation, and regression analysis are used to evaluate the relationship between FinTech adoption and bank profitability. The findings reveal a strong positive relationship between FinTech adoption and profitability, indicating that increased digitalization enhances operational efficiency, cost reduction, and revenue generation. The study concludes that FinTech adoption has become a strategic necessity for improving the financial performance and sustainability of Indian commercial banks.