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<p>This paper investigates the impact of FinTech on MENA financial institutions’ profitability. Data have been gathered using the Refinitiv Eikon platform, and from annual reports and the World Bank database for banks included in 11 countries in the MENA region. The sample comprised 63 banks during the past 14&#xa0;years (2010–2023). Text mining was applied to all banks’ annual reports to create a FinTech index measure. Additionally, Tobit regression was applied to empirically explore the impact of the FinTech Index on MENA banks' profitability, controlling for firm characteristics (such as size, capital adequacy and market share) and macroeconomic variables (such as GDP and inflation). Our results suggest that greater FinTech inclusion in banks increases profitability, with larger banks, adequate capital banks, and banks with larger market share all expected to perform better. Similarly, our results suggest that macroeconomic variables (GDP and inflation) affect bank profitability positively. This implies that top-level managers should incorporate greater use of FinTech into their long-term decision-making to enhance performance. The results are robust based on the Maximum Likelihood Estimator (MLE) regression results.</p>

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Realizing opportunities: the influence of FinTech on the success of MENA banks

  • 期刊论文

  • 出版模式：

    开放获取

  • 发表日期：

    2025年6月4日

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  • Bashar Abu Khalaf,
  • Adel Al-Sharkas,
  • Adel Sarea

摘要

This paper investigates the impact of FinTech on MENA financial institutions’ profitability. Data have been gathered using the Refinitiv Eikon platform, and from annual reports and the World Bank database for banks included in 11 countries in the MENA region. The sample comprised 63 banks during the past 14 years (2010–2023). Text mining was applied to all banks’ annual reports to create a FinTech index measure. Additionally, Tobit regression was applied to empirically explore the impact of the FinTech Index on MENA banks' profitability, controlling for firm characteristics (such as size, capital adequacy and market share) and macroeconomic variables (such as GDP and inflation). Our results suggest that greater FinTech inclusion in banks increases profitability, with larger banks, adequate capital banks, and banks with larger market share all expected to perform better. Similarly, our results suggest that macroeconomic variables (GDP and inflation) affect bank profitability positively. This implies that top-level managers should incorporate greater use of FinTech into their long-term decision-making to enhance performance. The results are robust based on the Maximum Likelihood Estimator (MLE) regression results.