The Nexus Between Fintech Adoption & Bank Performance: A Role of Competitiveness

Abstract

This research investigates the relationship between fintech adoption, competitiveness, and bank performance within Pakistan's banking industry, encompassing Islamic and conventional banking practices. This study empirically examines the impact of fintech adoption on the performance of banks in Pakistan, unveiling a nuanced relationship shaped by the moderating effect of competitiveness. The findings of this research reveal that the relationship between fintech adoption and bank performance is significantly influenced by competitiveness, displaying a complex interplay with both positive and negative implications. While fintech adoption holds the potential to enhance banks’ efficiency, profitability, and customer loyalty, it also introduces challenges and threats to the established norms of the traditional banking sector. Moreover, this study identifies several critical research gaps and proposes avenues for future investigations to comprehensively understand the role of Fintech within Pakistan's financial system. The evolution and integration of Fintech present both opportunities and challenges, underscoring the need for continued exploration and analysis to navigate this transformative landscape better. However, this research contributes to understanding how adopting Fintech impacts bank performance in Pakistan, highlighting the moderating role of competitiveness and the duality of opportunities and challenges presented by Fintech in the banking realm.