INSTITUTIONAL AND REGULATORY FOUNDATIONS FOR THE DEVELOPMENT OF FINTECH INNOVATIONS IN BANKING UNDER THE CONDITIONS OF THE DIGITAL TRANSFORMATION OF THE ECONOMY

Анотація

The chapter examines the institutional and regulatory foundations of fintech innovation development in banking under conditions of digital transformation of the economy.The transformation of banking models under the influence of digital technologies, open banking, virtual assets, digital public infrastructure, and ESGoriented regulation is conceptualized as a systemic restructuring of financial intermediation.Theoretical and methodological approaches to the interpretation of fintech innovations in banking are systematized, while the complementarity between functional mapping and smart regulation approaches is substantiated.A synthetic four-contour model of fintech innovation development is proposed, integrating digital public infrastructure, experimental regulation, prudentialcompliance mechanisms, and ESG-oriented governance.Comparative analysis of regulatory architectures in the European Union, the United Kingdom, the United States, and Ukraine reveals distinct approaches to the regulation of fintech innovations, virtual assets, and digital financial infrastructure.Attention is devoted to the institutional role of regulatory sandboxes, MiCA, DORA, the DLT Pilot Regime, and open banking frameworks in balancing innovation development and financial stability.The institutional functions of the National Bank of Ukraine, the Ministry of Digital Transformation of Ukraine, BankID, and Diia in the formation of the digital financial ecosystem are also analysed.The chapter further examines the integration of e-KYC, digital identification, API interaction, and document-sharing mechanisms into banking customer services.The interrelationship between fintech innovations, ESG risk management, sustainable finance, and ethical regulation of digital banking is identified.The findings demonstrate that banks are increasingly transforming into platformbased institutional structures combining financing, data processing, digital identification, ESG assessment, and risk management functions.In this context, fintech innovations form the institutional basis for the digital, innovative, and green transformation of the banking sector.

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