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The Impact of Financial Technology on Banking Sector: Evidence from Egypt

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  • Marwa Rabe Mohamed Ali Elkmash

Abstract

Purpose: Financial technology is now critical for each firm to ease and simplify commercial transactions. The purpose of this study is to examine the efficiency of the banks in Egypt after the spread of FinTech. Design/Methodology/Approach: The shortage of studies in this field in Egypt is presented as the paper's concern. Financial statement data were used for a period from 2014-2020 from the CBE Egyptian bank with Fintech collaborations. Three alternative models with different input-output combinations were developed, based on production, profitability, and intermediation dimensions to evaluate the banks' efficiency using DEA technique. Findings: The results revealed that the Egyptian banks' efficiency does not relatively improved by introducing the financial technology except for deposits and total loans. Research implications: This study contributes to the literature on the adoption status of Fintech services in Egypt and its impact on the banks' efficiency. Egyptian banks need to find more innovative ways to accelerates the transforming of the Egyptian society into a non-monetary society. Originality/value: This study holds significance as it provides the empirical evidence for insufficient improving Egyptian banks' efficiency by introducing the financial technology except for deposits and total loans and the necessity to rushes the renovating of the Egyptian society into a non-monetary society as a part of the Egypt's 2030 Sustainable Development Plan.

Suggested Citation

  • Marwa Rabe Mohamed Ali Elkmash, 2022. "The Impact of Financial Technology on Banking Sector: Evidence from Egypt," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 12(1), pages 100-118.
    • Handle: RePEc:ers:ijfirm:v:12:y:2022:i:1:p:100-118
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    References listed on IDEAS

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    1. Yinqiao Li & Renée Spigt & Laurens Swinkels, 2017. "The impact of FinTech start-ups on incumbent retail banks’ share prices," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-16, December.
    2. Hasnan Baber, 2020. "FinTech, Crowdfunding and Customer Retention in Islamic Banks," Vision, , vol. 24(3), pages 260-268, September.
    3. Ruihui Pu & Deimante Teresiene & Ina Pieczulis & Jie Kong & Xiao-Guang Yue, 2021. "The Interaction between Banking Sector and Financial Technology Companies: Qualitative Assessment—A Case of Lithuania," Risks, MDPI, vol. 9(1), pages 1-22, January.
    4. Cheng, Maoyong & Qu, Yang, 2020. "Does bank FinTech reduce credit risk? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 63(C).
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    More about this item

    Keywords

    FinTech; banking efficiency; DEA;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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