Opportunities and Challenges of Fintech in Risk Management: Analysing Risk Mitigation Strategies in Indian Retail Banking

Abstract

The rapid growth of fintech has introduced transformative opportunities and unique challenges for risk management in the Indian retail banking sector. This study investigates how fintech-driven solutions are reshaping risk mitigation strategies in areas such as fraud detection, credit risk, and operational efficiency. Specifically, it evaluates the effectiveness of various fintech tools while addressing the complexities posed by regulatory requirements, technological barriers, and cybersecurity concerns unique to the Indian market. Employing a quantitative analysis of 300 data points sourced from Indian retail banks, this research applies simulation models and statistical analyses to assess the impact of fintech on risk management efficacy. Findings indicate a significant improvement in risk mitigation through fintech adoption, yet highlight critical challenges in maintaining regulatory compliance and data security. Based on these insights, the study offers strategic recommendations for enhancing resilience and operational sustainability. This research contributes to the understanding of fintech’s role in risk management, providing actionable insights for Indian retail banks and policymakers aiming to harness fintech’s potential while safeguarding against inherent risks.