FinTech and Traditional Banking in Iraq: A Disruptive Challenge or an Opportunity for Strategic Integration

This study investigates the evolving relationship between FinTech and traditional banking institutions in Iraq, focusing on whether this dynamic represents disruption or an opportunity for strategic integration. The research aims to assess the extent of FinTech adoption, the readiness of Iraqi banks to engage with digital innovations, and the key enablers and barriers influencing this transformation. Additionally, it explores customer attitudes toward digital financial services and offers strategic recommendations for fostering collaboration between FinTech firms and conventional banks. Employing a descriptive–analytical research design, the study combines contextual mapping with empirical evaluation. Data were collected through a structured questionnaire targeting stakeholders in Iraq’s financial sector. The instrument included closed-ended items and Likert-scale statements to capture perceptions, experiences, and behavioral trends. Analytical techniques involved descriptive statistics, Pearson correlation, and multiple regression analysis using SPSS software. The data were screened for validity, and results were interpreted at a 95% confidence level. Findings indicate moderately high levels of FinTech adoption (mean = 3.60), with customer satisfaction (mean = 3.36) and perceived bank performance (mean = 3.27) also above average. The regulatory environment scored lowest (mean = 2.73), suggesting limited institutional support. Correlation analysis revealed positive associations between FinTech adoption and both bank performance (r = 0.42) and customer satisfaction (r = 0.48). Regression results confirmed that FinTech usage, customer experience, and regulatory conditions significantly influence bank performance. The study concludes that FinTech presents a constructive pathway for Iraqi banks to modernize operations, enhance service delivery, and expand financial inclusion. With appropriate policy frameworks and institutional readiness, the integration of FinTech and traditional banking can foster a more innovative and resilient financial ecosystem in Iraq.