Financial technology (fintech) has emerged as one of the most advanced innovations in the financial industry, playing a significant role in transforming traditional banking patterns. This study examines the impact of fintech development on the liquidity and income diversification of banks listed on the Tehran Stock Exchange from 2015 to 2023. The fintech development index is defined across two dimensions: access (number of issued credit cards) and usage (number of ATM transactions), with data analyzed using the panel data method and the Pooled Mean Group (PMG) model. The results indicate that fintech development has significantly reduced bank liquidity. However, it has had a positive impact on income diversification, suggesting that banks adopting fintech are moving toward expanding their revenue sources. Additionally, the analysis of control variables, such as bank size and gross domestic product, revealed important influences on the outcomes. These findings contribute to identifying the strengths and weaknesses in adopting financial technologies and provide a deeper understanding of the dynamics of Iran’s banking system in the face of financial innovations.