金融科技和GDP对银行绩效会造成什么影响影响？.pdf

Citation:Yoon,Soon Suk,HongbokLee,and Ingyu Oh.2023.DifferentialImpact of Fintech and GDP on BankPerformance:Global Evidence.Journal of Risk and FinancialManagement 16:304.https:/doi.org/10.3390/jrfm16070304Academic Editor:Thanasis StengosReceived:19 May 2023Revised:18 June 2023Accepted:18 June 2023Published:21 June 2023Copyright:2023 by the authors.Licensee MDPI,Basel,Switzerland.This article is an open access articledistributedunderthetermsandconditions of the Creative CommonsAttribution(CC BY)license(https:/creativecommons.org/licenses/by/4.0/).Journal ofRisk and FinancialManagementArticleDifferential Impact of Fintech and GDP on Bank Performance:Global EvidenceSoon Suk Yoon1,Hongbok Lee1and Ingyu Oh2,3,4,*1School of Accounting,Finance,Economics,and Decision Sciences,College of Business and Technology,Western Illinois University,1 University Circle,Macomb,IL 61455,USA;ss-yoonwiu.edu(S.S.Y.);h-leewiu.edu(H.L.)2College of Global Engagement,Kansai Gaidai University,Osaka 573-1001,Japan3International Centre for Organization&Innovation Studies,Singapore 518152,Singapore4Asia Pacific Business Review,London SW1P 1WG,UK*Correspondence:oingyukansaigaidai.ac.jpAbstract:Using the World Bank Global Findex Database for 91 countries in 2014,2017,and 2021,weexamine whether fintech levels influence bank performance and whether fintechs interaction withGDP per capita causes differential effects on bank performance globally.Since fintech levels werealready very high for rich countries when the World Bank started providing fintech developmentstatistics in 2014,we estimate AbFintech by regressing fintech levels on GDP per capita by year.AbFintech is the difference between the fintech level and its fitted values.Then,using multipleregression analyses,we investigate the impact of AbFintech on bank performance worldwide,focusingon the differential effects of AbFintech and GDP levels on bank performance.We find AbFintechsignificantlyincreasesbankperformance,primarilyinlessdevelopedcountries.Specifically,AbFintechincreases banks ROA in the least developed countries and net interest margin in 75th percentilecountries.Also,AbFintech decreases the cost-to-income ratio in 75th percentile countries,while itincreases the ratio in the most developed countries.The resulting policy implication is that banks inless developed countries benefit most from investing in fintech innovation since they can providea broader customer base,including formerly unbanked or underbanked customers,with moreconvenient services at lower costs.Keywords:fintech;abnormal fintech;bank performance;ROA;net interest margin;income mix;cost-to-income ratioJEL Classification:G10;G15;G20;G21;O0;O31.IntroductionWe examine the impact of fintech development on bank performance using globaldata extracted from the World Bank Database.The Financial Stability Board(2017,p.7)defines fintech as“technology-enabled innovation in financial services that could resultin new business models,applications,processes,or products with an associated materialeffect on the provision of financial services.”Fintech activities cover virtually the entirespectrum of financial services at both the retail(i.e.,households and small and mediumenterprises)and wholesale(corporations,non-bank financial institutions,and inter-bank)levels,including(i)payments,clearing,and settlement;(ii)deposits,lending,and capitalraising;(iii)insurance;(iv)investment management;and(v)market support(FinancialStability Board 2017).“The big promise of fintech is to build on the potential cost-cuttingallowed by digital technologies to dramatically reduce financial frictions”(Bofondi andGobbi 2017,p.111).Stulz(2022)provides a shorter definition of fintech as“financial innovation that isbased on the use of digital technologies and big data.”He expects fintech firms to beJ.Risk Financial Manag.2023,16,304.https:/doi.org/10.3390/jrfm16070304https:/ Financial Manag.2023,16,3042 of 17able to compete with incumbent banks through offering cheaper and better productsmore conveniently.Constraints and costs associated with(large)incumbent banks,such asregulatorycosts,legacyITsystems,andorganizationalfrictionsinherentindiversifiedfirms,operate as advantages for fintech firms.At the same time,he argues that incumbent bankshave their competitive advantages,such as large established customer bases,experience indealing with regulators,and a broader set of product offerings.Fintech service providers enhance competition in financial markets through deliveringservices provided by incumbent financial institutions more efficiently or introducing newservices,but they will not replace traditional financial institutions(Navaretti et al.2017).Incumbent banks are actively responding to the competition from fintech firms throughreplicating fintech models such as online lending platforms or partnering with fintech firms.Therefore,traditional financial institutions and fintech firms will likely coexist and compete(Bofondi and Gobbi 2017).Numerous studies examine the effect of fintech development on bank performance.1The results are mixed.Among others,Phan et al.(2020)report that the growth of fintechfirms in Indonesia negatively affects bank performance.Katsiampa et al.(2022)also reportfintech firms entry into the credit market erodes traditional Chinese banks profitability.Contrary to the reports above,several studies show fintech development is positivelyassociated with the performance of financial institutions.For example,Haddad and Hornuf(2021)examine 87 countries for 20062018 and report that the number of fintech startupformations is significantly positively associated with profitability and stock returns oftraditional financial institutions.Nguyen et al.(2022)find fintech credit significantlypositively affects the risk-adjusted profitability by examining 73 countries for 20132018.Li et al.(2017)report the stock returns of incumbent retail banks in the United States aresignificantly positively related to the growth of fintech funding volume and the growth ofthe number of fintech deals.Ky et al.(2019)report that mobile money services significantlyenhance banks profitability in the East African Community.Those studies examine individual countries or multiple countries in aggregate.Unlikethe existing literature,we segment our sample of 91 countries into quartiles based onGDP per capita.As our primary contribution to the literature,we investigate the effectof the interaction between fintech and country income levels on bank performance.Wepredict the marginal contribution from fintech innovations during our sample period isgreater in underdeveloped countries than in rich countries since fintech adoption wasalready widespread in rich countries by the time the World Bank started providing fintechdevelopment indices,and developing economies can benefit from backwardness advantage(Barsby 1969;Andersson and Axelsson 2016).Further,we make improvements over existingstudies on measuring fintech levels.Prior research uses various metrics for fintech levelsthat potentially have multicollinearity issues in regression analyses.To properly executethe regression analyses without the interference of the multicollinearity issue,we inventeda new fintech development measure,abnormal fintech(AbFintech).Consistent with our prediction,we find that AbFintech significantly increases bankperformance,primarily in less developed countries.Specifically,AbFintech increases ROAin the least developed countries and NIM in 75th percentile countries.Interestingly,thepositive effect of AbFintech on NIM declines in magnitude and significance as the fintechapplication setting moves from the less developed to richer countries.In addition,AbFin-tech decreases the cost-to-income ratio(i.e.,improves bank efficiency)in 75th percentilecountries,while it increases the ratio(i.e.,worsens bank efficiency)in the richest countries.However,there is no significant association between AbFintech and the income mix ratio,measured as noninterest income to total income.We make two significant contributions to the extant literature on the effect of fintech onfinancial industry performance.First,we devised a new measure of fintech development,AbFintech,generated by regressing fintech levels on GDP per capita.AbFintech representsregression residuals for individual countries by year.By controlling GDP per capita inmeasuring fintech levels,we can measure fintechs effects on bank performance moreJ.Risk Financial Manag.2023,16,3043 of 17accurately as we avoid the multicollinearity issue in the regression analysis that arises fromthe high correlation between GDP per capita and fintech development.We believe this isthe most sensible way of addressing our research question,whether fintech adoption hasa differential impact on bank performance in distinct groups of countries with differentincome levels.Second,we investigate the interaction effects of AbFintech with the countrysincome category by segmenting the sample into quartiles of income levels.To our knowl-edge,no previous studies have examined the interaction effects of fintech and the countrysincome level.This article reviews extant literature and develops hypotheses in the next section.Section 3 presents data and descriptive statistics.The research design is detailed in Section 4,and the results are provided in Section 5.Section 6 provides the implications and limitationsof the study.Finally,Section 7 summarizes and concludes.2.Literature Review and Hypothesis Development2.1.Prior LiteratureNumerous studies examine the effect of fintech on bank performance or behavior,covering individual countries(Li et al.2017;Misati et al.2020;Phan et al.2020;Wang et al.2021;Katsiampa et al.2022;Li et al.2022;Zhao et al.2022),particular regions on the globe(Vives 2017;Ky et al.2019),and many countries across the world(Haddad and Hornuf2021;Nguyen et al.2022).In addition,some studies examine the impact of disruptivetechnologies and P2P platforms on banks(Chen et al.2019;Tang 2019).The results aremixed.Phan et al.(2020)examine the growth in the number of fintech firms and its impact onbank performance in the Indonesian market from 1998 to 2017.They report that the growthof fintech firms negatively affects bank performance measured by ROA(return on assets),ROE(return on equity),NIM(net interest margin),and YEA(yield on earning assets).Katsiampa et al.(2022)study how the growth of exchange-listed fintech lenders in Chinafor 20132019 affects banks financial performance.They find that fintech firms entry intothe credit market erodes traditional banks profitability measured by ROA and ROE.Zhaoet al.(2022)study fintech development in China and its impact on bank performance from2003 to 2018.Based on the fintech development index constructed by the total number offintech companies established,registered capital,number of financing events and amountof financing,they report that fintech development improves banks capital adequacy andmanagement efficiency but worsens asset quality and earning power.They argue thatcompetition from the fintech industry(e.g.,P2P lending)causes Chinese banks assetquality and earning power to deteriorate.Li et al.(2022)construct a fintech index via textual analysis of the annual reportsof 36 commercial banks in China for 20032019 and assess the impact of fintech on therevenue margin of commercial banks.They examine the four dimensions of fintech,including technology basis(represented by the keywords of big data,cloud computing,AI,blockchain,and biometrics),electronic communication(E-banks and online banks),electronic financing(Internet lending and network financing),and electronic payment(mobile payment).Their findings are mixed in the sense that technological basis has asignificantly negative effect on the performance of commercial banks,whereas electronicpayment has a positive impact.Li et al.(2017)investigate the impact of digital bankingstartups on the stock returns of traditional banks using the data of the US digital bankingstartups(funding volume and the number of deals)and the US retail banks from 2010 to2016.They find that the stock returns of incumbent retail banks are significantly positivelyassociated with the fintech funding growth and the number of fintech deals.They arguethat the results present no evidence of incumbents value destruction by the growth ofthe fintech industry but rather that the fintech industry has a positive spillover to thetraditional retail banking industry.Misati et al.(2020)examine the effect of fintech services on bank performance inKenya from 2009 to 2018.They use the value of mobile transactions and the number ofJ.Risk Financial Manag.2023,16,3044 of 17mobile accounts to measure the level of fintech services.When all banks are examined,thevalue of mobile transactions is positively related to the banks ROE,whereas the effect ofthe number of mobile accounts is insignificant.However,when the sample is segmentedinto groups of large,medium,and small banks,the positive effect of the value of mobiletransactions on bank profitability is most pronounced for large banks.For small banks,theimpact of the mobile transaction value is insignificant.In contrast,the number of mobileaccounts negatively affects the banks ROE during the interest-rate capping period in thelater sample period,September 2016 to June 2018.Wang et al.(2021)assess the impact of fintech on the Chinese banking industry from2008 to 2017.Their fintech development indicators include big data,artificial intelligence,distributed technology,the interconnectedness of technology,and technology security.They report that fintech development improves the total factor productivity2of Chinesecommercial banks.They argue fintech helps reduce bank operating costs,improves serviceefficiency,strengthens risk control capabilities,and creates enhanced customer-orientedbusiness models.Ky et al.(2019)study the effect of mobile money services of banks on their performancein the East African Community(Burundi,Kenya,Rwanda,Tanzania,and Uganda)from2009 to 2015.They report significantly positive relationships between mobile moneyservices and banks profitability measured by ROA,ROE,and Z-score.Also,they documenta significantly negative association between mobile money services and banks efficiency,measured using the cost-to-income ratio.Vives(2017)notes that mobile-based paymentservices significantly impact countries where a small percentage of people own a currentaccount at a bank.In African countries,people have greater access to a mobile phone thana traditional bank account,and thus,these countries are becoming testing grounds for newpayment systems.Haddad and Hornuf(2021)examine the effect of the number of fintech startupson the performance of financial institutions in 87 countries from 2006 to 2018.Theyreport that an increase in fintech startups positively affects incumbent financial institutionsperformance,while its impact has declined recently.Specifically,the number of fintechstartups