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The impact of FinTech firms on bank financial stability

Author

Listed:
  • Md Safiullah

    (RMIT University, School of Economics, Finance and Marketing)

  • Sudharshan Reddy Paramati

    (University of Dundee)

Abstract

This study is the first to examine the impact of FinTech firms on bank financial stability. Using a sample of 26 banks from an emerging market (Malaysia), over the period 2003–2018, we find that the development of FinTech firms over time increases bank financial stability. We uncover further evidence that FinTech firms’ impact on bank financial stability holds when we conduct sub-sample analyses by bank size, bank type (Islamic vis-à-vis conventional), and level of corporate governance. The results are robust to alternative model specifications, measures of financial stability, and FinTech.

Suggested Citation

  • Md Safiullah & Sudharshan Reddy Paramati, 2024. "The impact of FinTech firms on bank financial stability," Electronic Commerce Research, Springer, vol. 24(1), pages 453-475, March.
  • Handle: RePEc:spr:elcore:v:24:y:2024:i:1:d:10.1007_s10660-022-09595-z
    DOI: 10.1007/s10660-022-09595-z
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    More about this item

    Keywords

    FinTech firms; Bank financial stability; Emerging market;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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