Bank FinTech and bank performance: evidence from an emerging market

Salah Kayed, Mohammad Alta’any, Rasmi Meqbel, Ibrahim N. Khatatbeh and Abdalkareem Mahafzah

Journal of Financial Reporting and Accounting, 2024, vol. 23, issue 2, 518-535

Abstract: Purpose - This study aims to explore the effects of internal financial technology (FinTech) integration within Jordanian banks on their performance metrics, specifically focusing on profitability, risk-taking and stock returns. Design/methodology/approach - Using panel data analysis, this study investigates the financial performance of 13 listed commercial banks in Jordan over a decade, from 2010 to 2019, to examine the hypothesized impacts of bank FinTech developments. In addition, several robustness tests addressing potential issues of endogeneity and autocorrelation are conducted to enhance the reliability of the results. Findings - The results reveal that the bank FinTech development significantly enhances bank profitability and inversely affects risk-taking levels, indicating a substantial and positive impact on financial performance and stability. However, the results suggest no significant evidence of the effect of bank FinTech development on stock return. Practical implications - The findings advocate for Jordanian commercial banks to continue and expand their investment in FinTech innovations, highlighting the crucial role these technologies play in enhancing financial performance and reducing bank risks. Additionally, these findings suggest that regulatory bodies and policymakers should develop and enhance institutional and regulatory environments to support and guide the FinTech evolution within the banking sector. Originality/value - This study sheds light on the relatively under-researched area of internal bank FinTech. It provides critical insights into how FinTech integration within banks contributes to their profitability and stability, offering another perspective that enriches the FinTech literature. This contribution is essential for devising future strategies, developing theoretical frameworks and informing policy decisions in the FinTech domain.

Keywords: Bank FinTech; Profitability; Risk-taking; Stock return (search for similar items in EconPapers)
Date: 2024
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:jfrapp:jfra-09-2023-0526

DOI: 10.1108/JFRA-09-2023-0526

Access Statistics for this article

Journal of Financial Reporting and Accounting is currently edited by Prof. Aziz Jaafar and Prof Khaled Hussainey

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