FinTech Innovations in Banking: Opportunities and Risks

The banking industry in Russia has been significantly reshaped by fintech innovations, combining “finance” and “technology” to enhance financial services. This shift presents both opportunities and risks, driven by evolving customer preferences, competitive pressure from startups, and potential cost reductions. This research looks at how fintech developments affect Russian banks' financial results, specifically looking at loan portfolios, net income, ROA, and ROE. The research emphasizes the importance of working with startups, creative organizational structures, and digital services using data from the Skolkovo innovation ranking. Results show that while collaboration with startups generally positively impacts ROA and ROE, this effect is not always statistically significant. A significant positive impact of innovative structures and digital services on net income was observed, emphasizing the importance of a robust innovative framework. These factors also significantly influence loan portfolios. The study concludes that fintech innovations are crucial for the future success of banks. Banks should prioritize investments in innovation and digital services, establish innovation labs, and foster partnerships with startups. Policymakers should support fintech adoption through facilitating collaboration and technological advancements. Keywords: Fintech, Banking, Innovation, ROA, ROE, Net Income, Loan Portfolio, Digital Services, Russia