Generative Artificial Intelligence in Fintech: Opportunities, Challenges, Digital Transformation and Future Research Directions
Generative Artificial Intelligence (AI) is changing the FinTech industry, by making the financial services faster, smarter, and more efficient. AI- tools such as ChatGPT, Gemini, Microsoft Copilot, and other large language models are helping financial institutions improve customer service, automate routine work, detect fraud, manage risks, and support better decision-making. These technologies are also helping banks and financial companies provide better digital services to their customers. At the same time, the increasing use of generative AI has created several challenges. These include data privacy, cyber security risk, AI bias, misinformation, ethical concerns, legal issues. These challenges need proper attention to ensure the safe and responsible use of AI in financial services. The main purpose of this study is to examine the role of Generative AI in the FinTech industry, identify its opportunities and challenges and understands it contribution to digital transformation. The study is based on entirely secondary data only. The data collected from research articles, e-journals, books, government publications, industry reports, case studies, reports of international organization, and various websites. The findings of the research show that generative AI is becoming an important technology in the FinTech sector. It improves customer experience, increases work efficiency, supports innovations and help reduce operating costs. However, financial institutions must also address issues related to data security, privacy, transparency, and ethical use of AI. The study suggests that financial institutions should adopt responsible AI- practices strengthen cyber security system, improve employee skills through regular training and follow government regulations and ethical guidelines. These measures can help in building trust and support the safe and sustainable use of Generative AI in the future of FinTech.