International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

Frequency: 12
line decor
  
line decor

 Volume 12, Issue 3 (March 2025), Pages: 28-37

----------------------------------------------

 Original Research Paper

The impact of financial technology (FinTech) on improving financial performance: The case of commercial banks in Jordan

 Author(s): 

 Fadi Mohammed Alshannag 1, *, Marah Mohammad Bani Hani 2, Bilal Eneizan 3, 4, Kashif Arif 5, Hassan N. Rawash 6

 Affiliation(s):

 1Business School, Financial Technology Department, Jadara University, Irbid, Jordan
 2Business School, Finance and Banking Department, Yarmouk University, Irbid, Jordan
 3Business School, Marketing Department, Jadara University, Irbid, Jordan
 4College of Science and Humanities Studies, Prince Sattam Bin Abdulaziz University, AsSulayyil, Saudi Arabia
 5Department of Accounting and Finance, Salim Habib University, Karachi, Pakistan
 6Business School, Business Information Technology Department, Jadara University, Irbid Jordan

 Full text

  Full Text - PDF

 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0009-0008-1323-6836

 Digital Object Identifier (DOI)

 https://doi.org/10.21833/ijaas.2025.03.004

 Abstract

This study explores the main financial technologies adopted by banks to improve their financial performance. The research sample includes 301 participants from commercial banks listed on the Amman Stock Exchange (ASE). Financial performance is considered the dependent variable, while financial technology (FinTech) is the independent variable. Multiple linear regression analysis will be used to test the hypotheses. The findings indicate that FinTech contributes to higher net income and total deposits. The study suggests that banks should adopt inclusive approaches to promote sustainable development.

 © 2025 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords

 Financial technology, Financial performance, Commercial banks, Sustainable development, Net income

 Article history

 Received 13 August 2024, Received in revised form 15 December 2024, Accepted 14 February 2025

 Acknowledgment

No Acknowledgment.

 Compliance with ethical standards

 Ethical considerations

Informed consent was obtained from all participants, and their anonymity and confidentiality were maintained throughout the study.

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

 Alshannag FM, Hani MMB, Eneizan B, Arif K, and Rawash HN (2025). The impact of financial technology (FinTech) on improving financial performance: The case of commercial banks in Jordan. International Journal of Advanced and Applied Sciences, 12(3): 28-37

 Permanent Link to this page

 Figures

 Fig. 1 

 Tables

 Table 1 Table 2 Table 3 Table 4

----------------------------------------------   

 References (35)

  1. Abad-Segura E, González-Zamar MD, López-Meneses E, and Vázquez-Cano E (2020). Financial technology: Review of trends, approaches and management. Mathematics, 8(6): 951. https://doi.org/10.3390/math8060951   [Google Scholar]
  2. Abdul-Majid M, Falahaty M, and Jusoh M (2017). Performance of Islamic and conventional banks: A meta-frontier approach. Research in International Business and Finance, 42: 1327-1335. https://doi.org/10.1016/j.ribaf.2017.07.069   [Google Scholar]
  3. Anderson JC and Gerbing DW (1988). Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103(3), 411-423. https://doi.org/10.1037/0033-2909.103.3.411   [Google Scholar]
  4. Barbu CM, Florea DL, Dabija DC, and Barbu MCR (2021). Customer experience in FinTech. Journal of Theoretical and Applied Electronic Commerce Research, 16(5): 1415-1433. https://doi.org/10.3390/jtaer16050080   [Google Scholar]
  5. Buchak G, Matvos G, Piskorski T, and Seru A (2018). FinTech, regulatory arbitrage, and the rise of shadow banks. Journal of Financial Economics, 130(3): 453-483. https://doi.org/10.1016/j.jfineco.2018.03.011   [Google Scholar]
  6. Caragea D, Cojoianu T, Dobri M, Hoepner A, Peia O, and Romelli D (2024). Competition and innovation in the financial sector: Evidence from the rise of FinTech start-ups. Journal of Financial Services Research, 65(1): 103-140. https://doi.org/10.1007/s10693-023-00413-7   [Google Scholar]
  7. Chen MA, Wu Q, and Yang B (2019). How valuable is FinTech innovation? The Review of Financial Studies, 32(5): 2062-2106. https://doi.org/10.1093/rfs/hhy130   [Google Scholar]
  8. Cheng M and Qu Y (2020). Does bank FinTech reduce credit risk? Evidence from China. Pacific-Basin Finance Journal, 63: 101398. https://doi.org/10.1016/j.pacfin.2020.101398   [Google Scholar]
  9. de Roure C, Pelizzon L, and Thakor A (2022). P2P lenders versus banks: Cream skimming or bottom fishing? The Review of Corporate Finance Studies, 11(2): 213-262. https://doi.org/10.1093/rcfs/cfab026   [Google Scholar]
  10. Fernando F and Dharmastuti CF (2021). FinTech: The impact of technological innovation on the performance of banking companies. In the Proceedings of the Second Asia Pacific International Conference on Industrial Engineering and Operations Management, Surakarta, Indonesia: 1031-1040.   [Google Scholar]
  11. Gai K, Qiu M, and Sun X (2018). A survey on FinTech. Journal of Network and Computer Applications, 103: 262-273. https://doi.org/10.1016/j.jnca.2017.10.011   [Google Scholar]
  12. Hair JF, Risher JJ, Sarstedt M, and Ringle CM (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1): 2-24. https://doi.org/10.1108/EBR-11-2018-0203   [Google Scholar]
  13. Henseler J, Hubona G, and Ray PA (2016). Using PLS path modeling in new technology research: Updated guidelines. Industrial Management & Data Systems, 116(1): 2-20. https://doi.org/10.1108/IMDS-09-2015-0382   [Google Scholar]
  14. Juengerkes BE (2016). FinTechs and banks–Collaboration is key. In: Chishti S and Barberis J (Eds.), The FinTech book: The financial technology handbook for investors, entrepreneurs and visionaries: 179-182. Wiley, Hoboken, USA. https://doi.org/10.1002/9781119218906.ch47   [Google Scholar]
  15. Knight E and Wójcik D (2020). FinTech, economy and space: Introduction to the special issue. Environment and planning A: Economy and space, 52(8): 1490-1497. https://doi.org/10.1177/0308518X20946334   [Google Scholar]
  16. Li Y, Spigt R, and Swinkels L (2017). The impact of FinTech start-ups on incumbent retail banks' share prices. Financial Innovation, 3: 26. https://doi.org/10.1186/s40854-017-0076-7   [Google Scholar]
  17. Lim SH, Kim DJ, Hur Y, and Park K (2019). An empirical study of the impacts of perceived security and knowledge on continuous intention to use mobile FinTech payment services. International Journal of Human–Computer Interaction, 35(10): 886-898. https://doi.org/10.1080/10447318.2018.1507132   [Google Scholar]
  18. Mer A and Virdi AS (2023). Navigating the paradigm shift in HRM practices through the lens of artificial intelligence: A post-pandemic perspective. In: Tyagi P, Chilamkurti N, Grima S, Sood K, and Balusamy B (Eds.), The adoption and effect of artificial intelligence on human resources management: 123-154. Emerald Publishing Limited, Leeds, UK. https://doi.org/10.1108/978-1-80382-027-920231007   [Google Scholar]
  19. Nangin MA, Barus IRG, and Wahyoedi S (2020). The effects of perceived ease of use, security, and promotion on trust and its implications on FinTech adoption. Journal of Consumer Sciences, 5(2): 124-138. https://doi.org/10.29244/jcs.5.2.124-138   [Google Scholar]
  20. Naz F, Karim S, Houcine A, and Naeem MA (2024). FinTech growth during COVID-19 in MENA region: Current challenges and future prospects. Electronic Commerce Research, 24(1): 371-392. https://doi.org/10.1007/s10660-022-09583-3   [Google Scholar] PMCid:PMC9295879
  21. Nguyen TT, Dao TT, Tran TB, Nguyen HT, Le LT, and Pham NT (2024). FinTech literacy and digital entrepreneurial intention: Mediator and moderator effect. International Journal of Information Management Data Insights, 4(1): 100222. https://doi.org/10.1016/j.jjimei.2024.100222   [Google Scholar]
  22. Nicoletti B, Nicoletti W, and Weis A (2017). Future of FinTech: Integrating finance and technology in financial services. Palgrave Macmillan, Cham, Switzerland.   [Google Scholar]
  23. Panjwani K and Shili N (2020). The impact of FinTech on development of Islamic banking sector in the contemporary world. Saudi Journal of Economics and Finance, 4(7): 346-350. https://doi.org/10.36348/sjef.2020.v04i07.006   [Google Scholar]
  24. Petralia K, Philippon T, Rice TN, and Veron N (2019). Banking disrupted?: Financial intermediation in an era of transformational technology. ICMB International Center for Monetary and Banking Studies, Geneva, Switzerland.   [Google Scholar]
  25. Romānova I and Kudinska M (2016). Banking and FinTech: A challenge or opportunity? Contemporary issues in finance: Current challenges from across Europe (Contemporary Studies in Economic and Financial Analysis, Vol. 98), Emerald Group Publishing Limited, Leeds, UK, 98: 21-35. https://doi.org/10.1108/S1569-375920160000098002   [Google Scholar]
  26. Sarstedt M, Ringle CM, Hair JF (2022). Partial least squares structural equation modeling. In: Homburg C, Klarmann M, and Vomberg A (Eds.), Handbook of market research. Springer, Cham, Switzerland. https://doi.org/10.1007/978-3-319-57413-4_15   [Google Scholar]
  27. Schueffel P (2016). Taming the beast: A scientific definition of FinTech. Journal of Innovation Management, 4(4): 32-54. https://doi.org/10.24840/2183-0606_004.004_0004   [Google Scholar]
  28. Senyo PK, Karanasios S, Agbloyor EK, and Choudrie J (2024). Government-led digital transformation in FinTech ecosystems. The Journal of Strategic Information Systems, 33(3): 101849. https://doi.org/10.1016/j.jsis.2024.101849   [Google Scholar]
  29. Suseendran G, Chandrasekaran E, Akila D, and Sasi Kumar A (2020). Banking and FinTech (financial technology) embraced with IoT device. In: Sharma N, Chakrabarti A, and Balas V (Eds.), Data management, analytics and innovation. Advances in Intelligent Systems and Computing, Vol 1042. Springer Singapore. https://doi.org/10.1007/978-981-32-9949-8_15   [Google Scholar]
  30. Urbach N and Ahlemann F (2010). Structural equation modeling in information systems research using partial least squares. Journal of Information Technology Theory and Application (JITTA), 11(2): 2.   [Google Scholar]
  31. Venaik A, Garg N, and Agarwal V (2024). Global revolutionary challenges and opportunities of FinTech globally. In: Anand S, Srivastav S, Garg V, and Garg G (Eds.), Revolutionary challenges and opportunities of FinTech: 187-203. Routledge, Oxfordshire, UK. https://doi.org/10.1201/9781003428718-11   [Google Scholar]
  32. Yao T and Song L (2023). FinTech and the economic capital of Chinese commercial bank's risk: Based on theory and evidence. International Journal of Finance and Economics, 28(2): 2109-2123. https://doi.org/10.1002/ijfe.2528   [Google Scholar]
  33. Yudaruddin R (2023). Financial technology and performance in Islamic and conventional banks. Journal of Islamic Accounting and Business Research, 14(1): 100-116. https://doi.org/10.1108/JIABR-03-2022-0070   [Google Scholar]
  34. Zaghlol AK, Ramdhan NA, and Othman N (2021). The nexus between FinTech adoption and financial development in Malaysia: An overview. Global Business and Management Research, 13(4): 365-375.   [Google Scholar]
  35. Ziemnowicz C (2020). Joseph A: Schumpeter and innovation. In: Carayannis EG (Ed.), Encyclopedia of creativity, invention, innovation and entrepreneurship: 1517-1522. Springer International Publishing, Cham, Switzerland. https://doi.org/10.1007/978-3-319-15347-6_476   [Google Scholar]