FinTech Empowerment of Digital Transformation in Small and Medium-Sized Banks: Pathways and Risk Analysis

Han Liu

doi:10.71222/3tc68q39

Authors

Han Liu School of Finance and Trade, Harbin Finance University, Harbin, Heilongjiang, 150030, China Author

DOI:

https://doi.org/10.71222/3tc68q39

Keywords:

FinTech, SME banks, digital transformation, risk management, sustainable banking

Abstract

This review examines the pathways and risks of FinTech-enabled digital transformation in small and medium-sized banks (SMEs). It explores core banking modernization, customer-facing digital channels, data-driven decision-making, and collaboration with FinTech startups as key strategies for enhancing operational efficiency, customer engagement, and competitiveness. The study also analyzes operational, cybersecurity, regulatory, and financial risks associated with digital adop-tion, and proposes mitigation strategies including technology governance, regulatory compliance frameworks, human capital development, and ecosystem collaboration. Finally, future research directions and practical recommendations for SMEs and policymakers are discussed, highlighting the potential of emerging technologies and sustainable banking practices to drive resilient and inclusive digital transformation.

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