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Fintech Tsunami or Evolution? How Nepalese Banks Are Adapting to the Era of Digital Wallets, Neobanks, and AI Scoring to Maintain Market Leadership
The global financial industry is experiencing unprecedented technological transformation. Digital payments, neobanking, and the widespread use of artificial intelligence (AI) are fundamentally changing the way financial services are delivered and consumed. These trends are particularly relevant for emerging markets like Nepal, where fintech presents both huge opportunities for disruption and significant challenges for traditional financial institutions. Nepal, which is looking to modernize its economy, is not immune to these global shifts. The country’s banking sector faces a key question: is the current wave of fintech innovation a disruptive “tsunami” that will dramatically change the market landscape and displace established leaders, or is it an “evolutionary” process that traditional banks can gradually adapt to by integrating new technologies into their existing models?
The answer to this question is critical to setting strategic priorities for both banks and regulators. The global fintech boom provides Nepal with a unique opportunity to leapfrog some of the traditional stages of financial infrastructure development. However, such a leap requires not only technological readiness but also appropriate adaptation of the regulatory environment and increased digital literacy among the population. Without these conditions, the rapid adoption of new technologies may lead to increased risks and a deepening digital divide. Moreover, the “tsunami or evolution” dichotomy may not have a universal answer for all segments of the Nepalese financial market. For example, the payments sector, with its rapid adoption of digital wallets and QR technologies, may already be experiencing the force of the “tsunami”. At the same time, the implementation of AI scoring in lending or the full-scale development of neobanks may turn out to be more gradual processes due to regulatory, infrastructural and cultural barriers.
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By Alpha Business MediaThe global financial industry is experiencing unprecedented technological transformation. Digital payments, neobanking, and the widespread use of artificial intelligence (AI) are fundamentally changing the way financial services are delivered and consumed. These trends are particularly relevant for emerging markets like Nepal, where fintech presents both huge opportunities for disruption and significant challenges for traditional financial institutions. Nepal, which is looking to modernize its economy, is not immune to these global shifts. The country’s banking sector faces a key question: is the current wave of fintech innovation a disruptive “tsunami” that will dramatically change the market landscape and displace established leaders, or is it an “evolutionary” process that traditional banks can gradually adapt to by integrating new technologies into their existing models?
The answer to this question is critical to setting strategic priorities for both banks and regulators. The global fintech boom provides Nepal with a unique opportunity to leapfrog some of the traditional stages of financial infrastructure development. However, such a leap requires not only technological readiness but also appropriate adaptation of the regulatory environment and increased digital literacy among the population. Without these conditions, the rapid adoption of new technologies may lead to increased risks and a deepening digital divide. Moreover, the “tsunami or evolution” dichotomy may not have a universal answer for all segments of the Nepalese financial market. For example, the payments sector, with its rapid adoption of digital wallets and QR technologies, may already be experiencing the force of the “tsunami”. At the same time, the implementation of AI scoring in lending or the full-scale development of neobanks may turn out to be more gradual processes due to regulatory, infrastructural and cultural barriers.