Title: Does FinTech adoption improve bank performance?

Authors: Wei Wang; Fernando Moreira; Yiteng Liang

Addresses: Guangxi University of Finance and Economics, 100 Mingxiu West Road, Nanning City, 530007, China ' University of Edinburgh, 29 Buccleuch Place, Edinburgh, EH8 9JS, UK ' University of Nottingham, 69 Northdown Road, Nottingham, NG83PF, UK

Abstract: In this paper, we estimate the effect of FinTech activities on bank performance by using data on 355 American banks from 2010 to 2020. Our results show that FinTech plays a significant role in promoting bank performance. Bank performance can be improved by 0.30% when the FinTech level is improved by one unit. We also find that the impact of FinTech on bank performance is heterogeneous in terms of bank size and chartered membership. In particular, the influence of FinTech on the leading banks and the state-chartered nonmember banks is more significant than on small and medium banks. Thirdly, the development of bank financial technology in every region of the United States is uneven. In addition, we put forward policy suggestions on how FinTech can promote bank performance in four aspects.

Keywords: FinTech; bank performance; commercial banks; heterogeneous impact; bank size; chartered membership; American banks; SysGMM; fixed effects; ordinary least squares.

DOI: 10.1504/IJMEF.2024.137546

International Journal of Monetary Economics and Finance, 2024 Vol.17 No.1, pp.1 - 28

Received: 30 Sep 2022
Accepted: 25 Feb 2023
Published online: 25 Mar 2024 *

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