The Effect of Fintech on Banks’ Performance: Jordan Case

Bashayreh, Ala' G.; Wadi, Rami Mohammad Abu

doi:10.1007/978-3-030-69221-6_62

Cited by 18 publications

(12 citation statements)

References 12 publications

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“…They also explore the effect of bank collaboration on banking performance. Bashayreh and Abu Wadi (2021) test the effect of using financial technology services on bank performance in Jordanian commercial banks between 2012 and 2018. The empirical findings show a positive impact of FinTech on banks' performance measured by the return on equity (ROE) with the addition of three control variables.…”

Section: Literature Reviewmentioning

confidence: 99%

Relationship between FinTech index and bank’s performance: a comparative study between Islamic and conventional banks in the MENA region

Kharrat

Trichilli

Abbes

2023

JIABR

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Purpose This paper aims to describe a new method for constructing the FintTech Index that measures the development of FinTech in the conventional and Islamic banking sectors in the Middle East and North Africa (MENA). It also tests the effect of this new proxy on the performance of conventional and Islamic banks in MENA countries. Design/methodology/approach Using data from Islamic and conventional banks in the MENA region between 2010 and 2020, the authors rely on Text Mining Technology with the help of AntConc, principal component and factor analysis. The study also uses the simultaneous equation model to test the interdependent relationship between FinTech and bank performance. Findings The study argues that the proposed measure effectively represents the FinTech industry in the MENA financial markets. The results provide micro evidence on the application of FinTech innovation in Islamic and conventional banks to improve their performance, profitability, stability and efficiency. Furthermore, the findings can provide insights for practitioners and researchers interested in implementing FinTech collaboration to enhance the performance of Islamic and conventional banks in the MENA region. Practical implications Investors can leverage this FinTech Index in portfolio investments, trading strategy and hedging in MENA countries. In addition, policymakers can benefit from the challenges outlined in this work to support the development and incubation of FinTech in conventional and Islamic banks. Thus, they can better recognize the new generation of banking services with which they need to deal and collaborate. Originality/value This paper makes a methodological contribution to the literature on FinTech search patterns by combining factor analysis with corpus processing software. This is the most comprehensive global FinTech index. In addition, to the best of the authors’ knowledge, this study is the first to examine the simultaneous relationship between the FinTech index and the performance of Islamic and conventional banks.

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Section: Literature Reviewmentioning

confidence: 99%

Relationship between FinTech index and bank’s performance: a comparative study between Islamic and conventional banks in the MENA region

Kharrat

Trichilli

Abbes

2023

JIABR

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“…Belouafi, 6 Bashayreh and Wadi, 8 Banna et al, 17 Muthukannan et al, 31 Mehrotra, 32 Chen, 36 Kalra, 48 Arora and Kaur, 51 Rangkuti et al, 56 Chen et al, 71 Leong et al, 76 Friedline et al, 88 Bu et al, 96 Zhang et al, 103 Flo ¨gel and Beckamp, 106 Yao and Song, 108 Mohamed et al, 114 Anand and Mantrala 115 5.…”

Section: Case Studiesmentioning

confidence: 99%

“…6,7 While some researchers reported work on GCC member countries using FinTech as the point of consideration. 8–10…”

Section: Introductionmentioning

confidence: 99%

“…6,7 While some researchers reported work on GCC member countries using FinTech as the point of consideration. [8][9][10] Consequently, the maturity of research on digitization and FinTech begs to systematically analyze the extant that can explicitly identify the materiality, variability, emergence, and richness of FinTech as a phenomenon. The systematic research work is extensively reported in many research fields, including healthcare, 11 intelligent homes, 12 crowdsourcing, 13 network IPv6 domain, 14 navigation assistant, 15 and many others, due to its higher capabilities to analyze the literature in a systematic manner by flushing lights on the gaps in a specific research domain and suggest new research directions by bridging these gaps.…”

Section: Introductionmentioning

confidence: 99%

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Utilizing the collective wisdom of fintech in the gcc region: A systematic mapping approach

Khan

Nazir

2022

Measurement and Control

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Globally, with the maturity of information technology, society is now in the information age, magnifying the significance of integrating innovative applications in different financial and other regulatory arenas. The emergence of financial technology (FinTech) based applications has transformed the traditional banking and regulatory systems and enhanced customer satisfaction by providing a balanced environment for protecting its customers from risky behavior or other potential disruptions. Besides these critical applications of FinTech in the financial industry, it is not developed in the Gulf Cooperation Council (GCC) region as in China, United States, and other developed countries. In order to bridge the gaps in the extant by identifying the critical factors involved, this research work presents a systematic analysis of the available literature reported during the period ranging from 2016 to 2021. This systematic mapping of the extant was performed by selecting five different research questions. The key objectives of this systematic research work are, (1) To identify the barriers that restrict the rise of FinTech in the GCC region, (2) Analyze the behavior of different communities regarding the adaptation of FinTech by evaluating the case studies reported, (3) the impacts of FinTech on different communities in the GCC region. (4) The findings of this research work will not only help the state development bodies by encouraging its stakeholders to use FinTech-driven applications in banking, markets, etc. but it will also help the people in maintaining long-term connection with the Ministries of Foreign Affairs, the Dutch regulators, Economic Affairs, the Dutch Central Bank (DNB), as well as with the Authority on Financial Markets (AFM), and (5) this study work will present new research directions for the research community to explore in the near future.

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“…Overall, fintech involves various applications of advanced technology that can support the development of the financial industry [19]. There is a significant positive relationship from fintech technology innovation to performance [20] and bank profitability [21]. Fintech technology can be used in reducing credit risk by making more reasonable credit assessments on credit default risk [22].…”

Section: Technology Adoptionmentioning

confidence: 99%

The Effect of Fintech on Conventional Bank Performance and Bank Risk

Harmadi¹,

Untoro²,

Trinugroho³

et al. 2022

Advances in Economics, Business and Management Research

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Fintech in Indonesia is growing very rapidly, this is also very interesting for researchers. This study looks at the effect of Fintech on the performance and risk of conventional banks in Indonesia. The proxy for fintech in this study is P2P lending and the adoption of fintech technology by banks. The number of conventional banks in Indonesia is 107 banks, and this study took a sample of 81 conventional banks. This research period is for 5 years from 2017 to 2021. The results show that P2P lending and fintech adoption do not affect the performance or risk of conventional banks. However, what is interesting about the results of this study is that the interaction between each independent variable with the moderating variable of bank ownership structure shows the results of the influence of the independent variable on the dependent variable which is significant. We find that bank ownership structure is proven to strengthen the effect of P2P lending and fintech adoption on bank risk, while the effect on performance is not significant. We found that the presence of P2P lending will increase the risk of conventional banks. While the effect of fintech adoption shows a lowering effect on bank risk, especially those owned by cooperatives. Our findings support previous research results that the presence of P2P lending will increase bank risk, and the adoption of fintech will decrease risk.

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The Effect of Fintech on Banks’ Performance: Jordan Case

Cited by 18 publications

References 12 publications

Relationship between FinTech index and bank’s performance: a comparative study between Islamic and conventional banks in the MENA region

Relationship between FinTech index and bank’s performance: a comparative study between Islamic and conventional banks in the MENA region

Utilizing the collective wisdom of fintech in the gcc region: A systematic mapping approach

The Effect of Fintech on Conventional Bank Performance and Bank Risk

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