Assessing the Role of the Fintech Era on the Banking Stability of an Emerging Economy: Interaction Analysis of the Indian Banking Industry

Syed Aamir Aijaz (), Grima Simon () and Sood Kiran ()
Additional contact information
Syed Aamir Aijaz: Institute of Management, Commerce and Economics, Shri Ramswaroop Memorial University, Lucknow, India
Grima Simon: University of Malta, Malta, Faculty of Economics Management and Accountancy, And the University of Latvia, Riga, Latvia. Faculty of Business, Management and Economics
Sood Kiran: Chitkara Business School, Chitkara University, Rajpura 140401, Punjab, India Research Fellow, Women Researchers Council (WRC), Azerbaijan State University of Economics (UNEC)

Folia Oeconomica Stetinensia, 2024, vol. 24, issue 1, 182-202

Abstract: Research background The rapid expansion in recent fintech innovations has garnered researchers’ attention to evaluate its influence on the banking industry. Purpose In this quest, the current study conducts an interaction analysis to measure the impact of the fintech era on Indian banking stability. Research methodology S imilarly t o p revious s tudies, w e u se a regression analysis and a Pearson correlation on the transition period of the fintech era to measure the impact of explanatory variables on the outcome variables of the Indian banking industry. Furthermore, as a robustness test, we have also used the Generalised Method of Moments system approach. This enabled us to make comparisons with similar studies. Results Using annual data from 1995 to 2021, the study reveals that, compared to the first fintech era, the second era assisted in reducing NPLs and enhancing financial stability in India. The study concludes that during the second wave of the fintech revolution, through interaction analysis, explanatory variables positively influence banking stability and NPLs. Novelty The current study contributes toward understanding the significance of fintech development from the context of an emerging country. It also helps to interpret the importance of disruptive forces of fintech development in the banking industry.

Keywords: fintech innovations; non-performing loans; banking stability; corruption; interaction analysis; fintech first wave; fintech era (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/foli-2024-0011 (text/html)

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:vrs:foeste:v:24:y:2024:i:1:p:182-202:n:1011

DOI: 10.2478/foli-2024-0011

Access Statistics for this article

Folia Oeconomica Stetinensia is currently edited by Waldemar Tarczyński

More articles in Folia Oeconomica Stetinensia from Sciendo
Bibliographic data for series maintained by Peter Golla ().