PRELIMINARY SUGGESTIONS OF FINTECH’S POSITIVE EFFECTS ON BANKS’ PERFORMANCE
A preliminary attempt is made to gauge whether incumbent banks have benefitted from adopting Fintech by examining the relationship between Fintech adoption and changes in banks’ costto-income ratio and return on assets (ROA).
Initial results show that changes in banks’ cost-to-income ratio and ROA are statistically correlated with their Fintech adoption status. A bank with a higher level of Fintech adoption is associated with a larger cumulative decline in its cost-to-income ratio as well as a larger cumulative rise in its ROA, other things being equal.
These preliminary results suggest that the adoption of Fintech has so far produced some positive effects on banks’ performance.
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