Competition and Cooperation Between Fintech Companies and Traditional Banks

Haochen Wu ()
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Haochen Wu: Long Pan Hu International School

A chapter in Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025), 2025, pp 139-148 from Springer

Abstract: Abstract The rapid advancement of financial technology (fintech) has significantly disrupted the traditional banking sector, introducing innovative solutions that enhance efficiency, accessibility, and user experience. Fintech companies have distinguished themselves from conventional banks by leveraging cutting-edge technologies such as blockchain, and big data analytics to deliver faster and more convenient financial services. This paper examines the competitive dynamics between fintech firms and traditional banks across three key dimensions: payment systems, credit services, and trust mechanisms. While fintech companies excel in agility, cost-effectiveness, and customer-centric innovations, traditional banks maintain competitive advantages in regulatory compliance, risk management, and established customer trust. Based on the analysis, this paper provides recommendations for fintech companies, traditional banks, and policymakers. Fintech firms should strengthen regulatory adherence and cybersecurity measures, while banks must accelerate digital transformation to remain competitive. Regulatory bodies should adopt a balanced approach—fostering innovation while ensuring financial stability and consumer protection. This study contributes to the ongoing discourse on the future of finance, emphasizing the importance of collaboration in shaping a sustainable digital economy.

Keywords: FinTech Company; Traditional Bank; Financial Services; Cooperation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-874-5_18

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DOI: 10.2991/978-94-6463-874-5_18

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