The influence of financial technology (Fintech) on the financial performance of National Saudi Arabia and Bahrain Banking

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Date

2024-09

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Cardiff University

Abstract

In recent years, the world has witnessed the rise of Financial Technology, often known as FinTech. Globally, this is a much-debated matter within the financial sector, particularly throughout the banking industry. In recent years, this emerging phenomenon has attracted the interest of scholars and has been extensively investigated in prior research. This study examines various aspects of the impact of financial technology on banking performance in Saudi Arabia and Bahrain. The research aimed to explore the potential influence of financial technology (FinTech) on the operational effectiveness of banks in the Kingdom of Saudi Arabia and Bahrain. The study employs a quantitative analysis of 17 banks from Saudia Arabia and Bahrain, which covers the period from 2017 to 2023. The findings of the study indicate that there was no statistically significant relationship found between the following FinTech tools: Banking messages (SMS), Internet banking (IB), Mobile applications (MMA), and Digital transfers (DT), and the metrics of Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM) for each respective item. Although the primary objective of this study was to investigate the impact of FinTech on crucial financial performance indicators, the findings indicate that the relationship may be complex and dependent on various factors such as regulatory environment, customer adoption, and technological infrastructure that should have been included in the focused analysis conducted in this research. Subsequent investigations should broaden the range of examination by incorporating these additional variables and dimensions through which FinTech could exert its influence.

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FinTech, Financial Technology, financial performance, bank performance, Saudi Arabia banks, Bahrain banks

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