Scholarlink

Purpose <p>The current research investigates the nexus between investments in financial technology (Fintech) and banks’ profitability. It also examines whether banks’ operational efficiency (OE) as a mediator and the bank size (BS) as a moderator can impact their profitability in digital transformation.</p> Design/methodology/approach <p>The Generalized method of moments (GMM) model is employed to construct estimators for 16 banks operating in Egypt from 2015 to 2022.</p> Findings <p>The empirical analysis reveals a significant and negative association between Fintech applications and banks’ profitability in Egypt. This can be attributed to the substantial expenses associated with digitalization as well as the influence of the challenging macroeconomic conditions. The results of our research provide evidence that operational efficiency mediates the nexus between Fintech and profitability. Furthermore, research has revealed that bank size does not moderate the impact of Fintech on profitability. However, due to higher earnings volatility bank size has a significant and negative association with banks’ profitability.</p> Research implications <p>Our research has important policy implications as we propose that while there is currently a negative association between the implementation of Fintech and banks’ profitability, banks are expected to achieve higher profitability in the future by increasing investment in Fintech.</p> Originality/value <p>Given the limited amount of existing research on Fintech applications in developing countries, this research intends to contribute to the existing literature by examining the mediating and moderating effects of a bank’s OE and BS on the association between Fintech and the profitability of banks operating in Egypt. Accordingly, this research highlights this nexus, which may have substantial implications for resolving the struggles experienced by the banks operating in Egypt after the crucial incidents it faced, which, in turn, affected the financial stability of the whole economy.</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

Bridging the nexus between Fintech, operational efficiency and banks profitability: the moderating role of bank size

  • 期刊论文

  • 出版模式：

    开放获取

  • 发表日期：

    2025年4月7日

查看全文
  • Asmaa Hamdy Abdelaziz Mohamed Elmahdy,
  • Menna Talla Khaled Mohamed Abdelkader,
  • Mina Ayman Mikhaeel Shaker

摘要

Purpose

The current research investigates the nexus between investments in financial technology (Fintech) and banks’ profitability. It also examines whether banks’ operational efficiency (OE) as a mediator and the bank size (BS) as a moderator can impact their profitability in digital transformation.

Design/methodology/approach

The Generalized method of moments (GMM) model is employed to construct estimators for 16 banks operating in Egypt from 2015 to 2022.

Findings

The empirical analysis reveals a significant and negative association between Fintech applications and banks’ profitability in Egypt. This can be attributed to the substantial expenses associated with digitalization as well as the influence of the challenging macroeconomic conditions. The results of our research provide evidence that operational efficiency mediates the nexus between Fintech and profitability. Furthermore, research has revealed that bank size does not moderate the impact of Fintech on profitability. However, due to higher earnings volatility bank size has a significant and negative association with banks’ profitability.

Research implications

Our research has important policy implications as we propose that while there is currently a negative association between the implementation of Fintech and banks’ profitability, banks are expected to achieve higher profitability in the future by increasing investment in Fintech.

Originality/value

Given the limited amount of existing research on Fintech applications in developing countries, this research intends to contribute to the existing literature by examining the mediating and moderating effects of a bank’s OE and BS on the association between Fintech and the profitability of banks operating in Egypt. Accordingly, this research highlights this nexus, which may have substantial implications for resolving the struggles experienced by the banks operating in Egypt after the crucial incidents it faced, which, in turn, affected the financial stability of the whole economy.