Fintech-driven resilience amid pandemic: a text mining analysis of the banking industry with ESG dynamics

Yosuke Kakinuma and Danai Likitratcharoen

Journal of Financial Regulation and Compliance, 2025, vol. 34, issue 2, 198-217

Abstract: PurposeThis study aims to investigate the role of financial technology (Fintech) in mitigating the impact of the COVID-19 pandemic on the banking sector. We constructed a Fintech index as a proxy for digital transformation and assessed its effect on financial performance and resilience. The study also examines how ESG commitments influence the effectiveness of digitalization.Design/methodology/approachWe conducted a text-mining analysis on the annual reports of publicly listed banks in Thailand from 2012 to 2023. Using AntConc software, we extracted Fintech-related keywords and applied principal component analysis (PCA) to create a Fintech index. We used fixed-effect regression models to examine the impact of Fintech adoption on banks’ profitability and shareholder value. To address endogeneity, we applied an instrumental variable regression. We also used a difference-in-differences approach to assess the role of Fintech in enhancing resilience during the COVID-19 period.FindingsBanks with higher Fintech adoption demonstrated stronger profitability and firm value, particularly during the pandemic. The positive interaction between Fintech and COVID-19 confirms digitalization’s role in resilience. ESG commitments negatively moderated this relationship, suggesting that sustainability efforts may limit financial gains from digital investments.Originality/valueTo the best of the authors’ knowledge, this study is among the first to apply text mining and PCA to analyze the impact of Fintech on banking resilience in the Asia-Pacific region during the COVID-19 pandemic. It also examines ESG as a moderating factor, offering new insights into how digitalization and sustainability interact in banking.

Keywords: Fintech; Text mining; Digitalization; Banking industry; ESG; COVID-19 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfrcpp:jfrc-11-2024-0218

DOI: 10.1108/JFRC-11-2024-0218

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