The Impact of Digital Currencies on Traditional Banking and Financial Systems. A survey analysis from employees working in Fintech companies in Ireland

Abstract

This research investigates the effect of digital currencies on traditional banking systems with an emphasis in fintech sector in Ireland. Digital currencies are becoming more and more popular, really hitting home for many traditional financial institutions. The study investigates the link between digital currency-driven fintech innovations and waning demand for mainstream banking services. The paper employs a hybrid methodology using quantitative data and disintermediation theory; the Technology Acceptance Model (TAM); and Institutional Theory to understand how digital currencies are changing the way that finance works. Main results show this slight to moderate positive relationship between (a) perceived risks in digital currency use and the fading of traditional banking service. The fintech’s are revolutionizing the market by using digital currencies for more efficient, safer and customerfocused financial solutions. But it also showed major obstacles to digital banking and the challenges for incumbent banks in adjusting their strategies if they wanted to stay relevant. The research supports academic literature by presenting an experimental threat from digital currencies and practical implications that must be considered for both traditional banks as well as fintech providers to adjust effectively. Policy implications are also covered, arguing for regulation strategies that incorporate new technology while protecting consumers as well as promoting financial stability. The challenge ahead for banks, fintech firms and regulators in a financial world transformed by the rise of digital currency.