Digital Transformation in Retail Banking: Fintech's Effect on Service Quality and Customer Satisfaction in Mumbai

Abstract: Introduction The rapid diffusion of financial technology (fintech) has fundamentally reshaped the delivery of retail banking services across urban India, with Mumbai the country's financial capital serving as an early adopter of digital banking innovation. Mobile banking applications, the Unified Payments Interface (UPI), robo-advisory tools, artificial-intelligence-driven chatbots and contactless payment systems have altered the manner in which customers interact with banks, raising important questions about how these technologies shape perceived service quality and, in turn, customer satisfaction. Purpose This study examines the extent to which fintech adoption influences the five SERVQUAL dimensions of service quality reliability, responsiveness, assurance, empathy and tangibles and overall customer satisfaction among retail banking customers in Mumbai. Methodology A descriptive and analytical research design was adopted. Primary data were collected from a sample of 100 retail banking customers in Mumbai through a structured questionnaire administered on a five-point Likert scale, supplemented by secondary data drawn from journals, RBI publications, NPCI reports and bank disclosures. Percentage analysis, mean analysis and Karl Pearson's correlation analysis were used to examine the relationships in the data. Findings Fintech adoption was found to be positively associated with customer-perceived service quality and satisfaction, with responsiveness and convenience-related dimensions showing the strongest association among Mumbai's retail banking customers. Respondents in the 21–40 age group and those with higher digital literacy reported significantly greater satisfaction with fintech-enabled banking channels than with traditional branch banking. All three hypotheses were statistically confirmed: a one-sample t-test showed fintech adoption is significantly related to perceived service quality (t = 12.46, p = 0.000); Karl Pearson's correlation confirmed a strong positive relationship between fintech-driven service quality and customer satisfaction (r = 0.72, p = 0.000); and a one-way ANOVA confirmed that satisfaction differs significantly across age groups (F = 3.85, p = 0.012). Implications The findings carry implications for retail banks seeking to refine digital-channel strategy, for regulators concerned with consumer protection and digital financial inclusion, and for future researchers seeking to extend the service-quality literature into the fintech domain.