The Mediating Role of Fintech on ESG and Bank Performance

Nur Badriyah Mokhtar () and Ashraful Alam ()
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Nur Badriyah Mokhtar: University of Salford
Ashraful Alam: BPP University

Chapter Chapter 10 in Fintech and Sustainability, 2023, pp 191-218 from Springer

Abstract: Abstract Despite the heated debate on banking transformation, there is little research on the performance of commercial banks and how they have been affected by fintech and environmental, social, and governance (ESG) goals. There have been several recent studies on the role of ESG in finance, but only a few studies explore the role of fintech either directly or indirectly. To address this gap, this study uses PLS-SEM, quantitative research, and a novel framework for describing the mediating role of fintech on ESG and bank performance in European Union (EU) commercial banks. Based on our research, we find that ESG has a positive impact on bank performance. More importantly, we find that fintech has a mediating effect on ESG and bank performance. Our study suggests that banks that are more engaged in fintech perform better with respect to environmental, social, and governance goals, which, in turn, leads to improved performance. Our findings provide information that will be of interest to financial decision-makers and regulatory authorities in elucidating the impact of fintech and ESG on commercial banking.

Keywords: Environmental; Social; Governance; Bank performance; Fintech; Commercial banks; European Union (EU); PLS-SEM (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-40647-8_10

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DOI: 10.1007/978-3-031-40647-8_10

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