Does FinTech adoption improve bank performance?
by Wei Wang; Fernando Moreira; Yiteng Liang
International Journal of Monetary Economics and Finance (IJMEF), Vol. 17, No. 1, 2024

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.

Online publication date: Mon, 25-Mar-2024

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