Financial technology and performance in Islamic and conventional banks

Rizky Yudaruddin

Journal of Islamic Accounting and Business Research, 2022, vol. 14, issue 1, 100-116

Abstract: Purpose - This paper aims to examine the impact of financial technology (FinTech) startups on Islamic and conventional banking performance in Indonesia. Design/methodology/approach - Data were collected from a sample of 124 conventional and Islamic banks in Indonesia from 2004 to 2018. The two-step generalized methods of moments was used to estimate the system model. Findings - This study finds that FinTech startups have a detrimental effect on bank performance. This study also finds that Islamic banks have low performance compared to conventional banks. However, when FinTech startups interact with Islamic banks, this paper discovers that a greater number of FinTech startups have a positive effect on the performance of Islamic banks, particularly the peer-to-peer lending category. Additionally, this paper finds that FinTech startups improve Islamic banks' performance in both normal and crisis periods. Practical implications - This paper provides recommendations for Islamic bank management and supervisors to deal with FinTech startups during normal and crisis periods by collaborating with FinTech startups and being willing to adopt cutting-edge financial technology applications. Originality/value - This paper provides evidence of the impact of FinTech on the performance of Islamic banks, specifically on peer-to-peer lending and payment startup during the crisis and normal periods.

Keywords: Global financial crisis; Islamic banks; Bank performance; Financial technology (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jiabrp:jiabr-03-2022-0070

DOI: 10.1108/JIABR-03-2022-0070

Access Statistics for this article

Journal of Islamic Accounting and Business Research is currently edited by Dr Mohammad Hudaib and Prof Roszaini Haniffa

More articles in Journal of Islamic Accounting and Business Research from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().