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Does Financial Technology Adoption Influence Bank’s Financial Performance: The Case of Jordan

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Listed:
  • Thair A. Kaddumi

    (Faculty of Business, Applied Science Private University, Amman 541350, Jordan
    MEU Research Unit, Middle East University, Amman 541350, Jordan)

  • Hafez Baker

    (Financial Services Company, Trading Company, Abu Dhabi 59559, United Arab Emirates)

  • Mahmoud Daoud Nassar

    (College of Business, Al Ain University, Abu Dhabi 112612, United Arab Emirates)

  • Qais A-Kilani

    (Faculty of Business, Applied Science Private University, Amman 541350, Jordan)

Abstract

This research will examine the impact of the adoption of financial technology on conventional banks’ financial performances. The research will place emphasis on the listed commercial banks at Amman Stock Exchange—ASE, using financial data for the period 2012–2020. The main study tool was a questionnaire that focuses on three main dimensions: financial inclusion—(FI), alternative payment methods—(APMs) and automation—(Auto). A total of 115 questionnaires were distributed to all commercial banks listed at Amman Stock Exchange—ASE. Multivariate regression analysis was employed to test the impact of the FinTech dimension as a proxy for independent variables on Jordanian commercial bank’s financial performance as a proxy for dependent variables. Based on the analysis results, the study concludes that all three FinTech dimensions: FI, APMs and Auto. reflected a positive significant impact on Jordanian commercial bank’s financial performance indicators (total deposit, total loans and net profit margin). Therefore, banks in general should invest more and more into financial technology tools and applications, in order to recruit potential clients and retain their current clients, to be able to sustain under fierce competition within the banking sector.

Suggested Citation

  • Thair A. Kaddumi & Hafez Baker & Mahmoud Daoud Nassar & Qais A-Kilani, 2023. "Does Financial Technology Adoption Influence Bank’s Financial Performance: The Case of Jordan," JRFM, MDPI, vol. 16(9), pages 1-17, September.
    • Handle: RePEc:gam:jjrfmx:v:16:y:2023:i:9:p:413-:d:1241954
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    References listed on IDEAS

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    1. Li, Jianping & Li, Jingyu & Zhu, Xiaoqian & Yao, Yinhong & Casu, Barbara, 2020. "Risk spillovers between FinTech and traditional financial institutions: Evidence from the U.S," International Review of Financial Analysis, Elsevier, vol. 71(C).
    2. Mark A Chen & Qinxi Wu & Baozhong Yang, 2019. "How Valuable Is FinTech Innovation?," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 2062-2106.
    3. Pradeep Dwivedi & Jawaher Ibrahim Alabdooli & Rajeev Dwivedi, 2021. "Role of FinTech Adoption for Competitiveness and Performance of the Bank: A Study of Banking Industry in UAE," International Journal of Global Business and Competitiveness, Springer, vol. 16(2), pages 130-138, December.
    4. Anagnoste Sorin, 2017. "Robotic Automation Process - The next major revolution in terms of back office operations improvement," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 11(1), pages 676-686, July.
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