Banking System: Transformations and Prospects in the Context of the Fintech Boom

Abstract

In recent years, the advancement of digitalization and the emergence of fintech have brought about profound transformations in banking services and the banking system itself. In general terms, banks have increased their level of digitalization through various strategies aimed at reducing costs in response to the growing presence of these new companies across different service segments. This reflects a shift and redefinition of the traditional banking business model. This paper adopts an exploratory approach to analyze these transformations, focusing on the Argentine case. Some of the guiding questions include: What changes have been generated in the banking system with the entry of new actors and technologies? How are these developments reshaping the banking business model? Which traditional banking functions are now being performed by fintech firms? The study concludes that we are witnessing a transformation in financial and banking services, characterized by an increase in market players, greater segmentation, and intensified competition aimed at cost reduction. Nevertheless, certain structural features of Argentina’s banking system—such as the low ratio of credit to GDP—show no clear signs of change in the short or medium term, despite these transformations.