MODERN FINANCIAL TECHNOLOGIES AND THEIR IMPACT ON TRADITIONAL BANKING PRACTICES IN GEORGIA

Erekle Meshveliani E-mail: [email protected] PhD student, Eastern European University Tbilisi, Georgia https://orcid.org/0009-0009-8490-0834 Abstract: The emergence of modern financial technologies (fintech) is revolutionizing financial markets worldwide, introducing transformational changes that create both opportunities and challenges for traditional financial institutions. This paper examines the impact of fintech on the financial market in Georgia, an emerging economy with a distinctive regulatory and competitive environment. The main purpose of this study is to analyze the impact of fintech on traditional banks in Georgia through a multi-faceted approach that addresses three main hypotheses. First, it examines whether traditional banks in Georgia are successfully adapting to the evolving financial environment by integrating modern financial technologies. Second, it assesses whether the existing regulatory framework in Georgia is effective in managing the risks associated with fintech innovations. Third, it evaluates whether increased competition from fintech firms contributes to the financial stability of traditional banks. To achieve these goals, the study employs a robust mixed-methods approach that integrates both qualitative and quantitative methodologies. The qualitative component consists of unstructured interviews with key stakeholders, including representatives from traditional financial institutions and the National Bank of Georgia. These interviews provide in-depth insights into how banks are managing the implementation of fintech and how regulators are addressing the challenges they encounter. This study makes several important contributions to the field. It offers original insights into the impact of fintech on traditional banks within the specific context of Georgia, a perspective not currently explored in the existing literature. The research findings provide valuable recommendations to policymakers and regulators in Georgia and other emerging markets, guiding the improvement of regulatory practices and supporting the successful integration of fintech. Additionally, by examining the unique challenges and opportunities facing emerging markets, this study enriches the global understanding of the effects of fintech on financial services, thereby enhancing the broader discourse on financial technology and its implications. Keywords: Traditional banks, fintech, finance, Georgia, technologies JEL classification: G20,G21,G28