Reconfiguring Financial Inclusion. The Impact of Fintech on Traditional Banking Structures in Eastern Europe

This study investigates the relationship between financial technologies (FinTech) and financial inclusion in Eastern European economies, with a focus on the heterogeneous structural and institutional characteristics of the region. Over the past two decades, digital transformation has redefined the architecture of financial systems, enabling wider access to services while creating new challenges for integration and regulation. By constructing a multidimensional Financial Inclusion Index (FInI)—covering geographic access, demographic access, and financial services usage—this research provides an empirical framework to measure inclusion and its evolution over time.The analysis is based on a balanced panel of ten Eastern European economies (EU and non-EU) during 2010–2023. Using Principal Component Analysis (PCA), composite indices for financial inclusion and FinTech development were built. The empirical models, estimated through panel regressions (Pooled OLS and Fixed Effects), also incorporate control variables such as trade openness, gross fixed capital formation, and education levels. Stationarity was ensured through unit root testing (ADF-Fisher) and first-order differencing.The results show a consistent, positive, and robust impact of FinTech development on all dimensions of financial inclusion. The strongest effects are observed on geographic access and on the overall FInI, highlighting the role of digital technologies in reducing dependence on physical banking infrastructure and in expanding access to underserved populations. Education and capital formation also contribute positively, whereas trade openness exhibits a negative but insignificant effect.Policy implications underline the need for strategic integration of FinTech into national and regional frameworks. Expanding digital infrastructure, adaptive regulation (including sandboxes and open banking), financial literacy programs, and international cooperation are critical to maximizing the benefits of FinTech for inclusive growth. Overall, the findings confirm that FinTech is not merely a complement to traditional banking, but a transformative driver of financial equity and sustainable economic development in Eastern Europe.