File(s) under permanent embargo
Do financial technology firms influence bank performance?
journal contributionposted on 2020-09-01, 00:00 authored by D H B Phan, Paresh Narayan, R E Rahman, A R Hutabarat
We develop a hypothesis that the growth of financial technology (FinTech) negatively influences bank performance. We study the Indonesia market, where FinTech growth has been impressive. Using a sample of 41 banks and data on FinTech firms, we show that the growth of FinTech firms negatively influences bank performance. We test our hypothesis through multiple additional tests and robustness tests, such as sensitivity to bank characteristics, effects of the Global Financial Crisis, and the use of alternative estimators. Our main conclusion that FinTech negatively predicts bank performance holds.