FINTECH EVOLUTION IN THE EUROPEAN UNION: TRENDS, DRIVERS AND CHALLENGES

The financial sector industry is fast changing with the rapid emergence of Fintech in Europe. This paper explores the evolution and current state of the Fintech sector in the European Union, focusing on its key dimensions and the challenges it faces. Using comprehensive indexes such as the Aggregate Fintech Activity Index and data from Statista and Eurostat, the study provides a multi-dimensional analysis of Fintech activity in the European Union. It examines trends and key drivers shaping Fintech`s development based on four dimensions: the number of Fintech companies, market capitalization, number of users and average transaction value per user. Findings underline regional disparities, with northern European countries leading in Fintech adoption due to advanced digital infrastructure, widespread use of online banking and digital payments, financial literacy and regulatory support. The study highlights Fintech`s dual role in advancing financial inclusion and disrupting traditional banking systems, emphasizing the need for strategic regulatory and market approaches to ensure sustainable sector growth.