The Role of FinTech in Determining the Performance of Banks: The Case of Middle East & North Africa (MENA) Region

Abstract

The purpose of this study is to investigate the relationship between these technologies and banking profitability, specific to the MENA region. This paper applied the mixed methodology in order to check if we can confirm the results achieved in running the regression by the managers and employee’s opinion which were gathered by interviews. We gathered data using Refinitiv Eikon platform for all banks included in Qatar, Turkey, Jordan, UAE, Egypt, Morocco and Saudi Arabia. The final sample included 45 banks for the period of 2010-2022, interviewing 37 managers and 63 employees. The two specific technologies that has been examined are internet and mobile banking services. In addition, other control variables included in the model representing bank characteristics are Size and Leverage. Through mixed methodology it was determined that all variables are positively correlated, however, the degree of significance varies with mobile banking, size, internet banking and leverage being ordered from most to least. This suggests that the performance of banks in the MENA region increase when they adopt more FinTech such as making their internet services and mobile banking application available to customers. Also, the interesting result is that the interview results confirmed the regression results and the managers/employee’s opinions stated that they believe that customers increased when the financial technology has been adopted and the perceived uselessness is great and this affected the profitability of banks significantly.