DO FINANCIAL TECHNOLOGY FIRMS INFLUENCE BANK PERFORMANCE?

Dinh Phan (), Paresh Kumar Narayan and Akhis R. Hutabarat

No WP/19/2018, Working Papers from Bank Indonesia

Abstract: In this paper we develop the hypothesis that the growth of financial technology (FinTech) will negatively influence bank performance. We study the Indonesia market, where FinTech growth has been impressive. Using a sample of 41 banks and data on FinTech firms, we show that the growth of FinTech firms negatively influences bank performance. We test our main conclusion through multiple additional and robustness tests, such as the sensitivity to bank characteristics, effects of the global financial crisis, and use of alternative estimators. Our main conclusion that FinTech negatively predicts bank performance holds.

Keywords: financial technology; bank performance; predictability; estimator (search for similar items in EconPapers)
Pages: 23 pages
Date: 2018
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https://publication-bi.org/repec/idn/wpaper/WP192018.pdf First version, 2018 (application/pdf)

Related works:
Journal Article: Do financial technology firms influence bank performance? (2020)
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