Impact Of Financial Technology’s Growth to Bank’s Performance and Efficiency at Pre Pandemic Covid-19
Abstract
COVID-19 outbreaks are known as catalysts of digitalization in all industries, including the financial industry, because of the emergence of financial technology. Prior research often illustrated the impact of emerging financial technology on industries at the moment or during a pandemic. However, little attention has been devoted to these impacts during the pandemic. Given a sight from the consumer's perspective, we tried to examine the causality between financial technology's growth and the bank's performance and efficiency. We utilized conventional banks as our population with sample criteria listed banks in Southeast Asia from 2017 to 2019. We employed generalized least squares and the generalized method of moment as regression methods to examine those causalities. Descriptive statistical analysis, determining estimation models, and classical assumption tests were also carried out. A total sample of 102 banks, Our findings suggest that ever since pre-pandemic, financial technology has significantly impacted banks' performance and efficiency. The growth of financial technology caused a significant decrease in the bank's performance and an increase in the bank's efficiency.
Keywords: Financial Technology, Performance, Efficiency, Banking, Pre-Pandemic
Abstrak
Wabah Covid-19 diketahui menjadi katalis digitalisasi pada semua industri termasuk industri keuangan melalui munculnya teknologi keuangan. Penelitian sebelumnya sering menjelaskan mengenai dampak teknologi keuangan pada saat atau pasca pandemi. Namun, masih sedikit penelitian yang berfokus pada dampak tersebut sebelum pandemi terjadi. Melihat dari sudut pandang konsumen, peneliti mengkaji hubungan sebab akibat antara pertumbuhan teknologi keuangan terhadap kinerja dan efisiensi bank. Menggunakan populasi bank konvensional dengan kriteria sampel bank yang terdaftar di bursa Asia Tenggara pada tahun 2017 hingga 2019. Peneliti mengoperasikan Generalized Least Square dan Generalized Method of Moment sebagai metode regresi untuk menguji hubungan tersebut. Selain itu dilakukan juga analisa descriptive statistic, determining estimation model, dan uji asumsi klasik. Dengan total sampel 102 bank, temuan menunjukkan bahwa sejak sebelum pandemi, teknologi keuangan telah berdampak signifikan terhadap kinerja dan efisiensi bank. Pertumbuhan teknologi finansial menyebabkan penurunan kinerja bank secara signifikan dan peningkatan efisiensi bank
Kata kunci: Teknologi Finansial, Kinerja, Effisiensi, Perbankan, Pra Pandemi
References
Aaker, D. A., Lane Keller, K., Chakravarti, D., Farquhar, P., Reibstein, D., Simon-son, ltamar, Shocker, A., & Stayman, D. (1990). Consumer Evaluations of Brand Extensions. In Journal of Marketing (Vol. 54).
Arslanian, Henri and Fabrice Fischer (2019). The Future o Finance: The Impact of Fintech, AI, and Crypto in Financial Services. London: Palgrave Macmillan
Bartik, A. W., Bertrand, M., Cullen, Z. B., Glaeser, E. L., Luca, M., & Stanton, C. T. (2020). Nber Working Paper Series How Are Small Businesses Adjusting To Covid-19? Early Evidence From A Survey. http://www.nber.org/papers/w26989
Beaunoyer, E., Dupéré, S., & Guitton, M. J. (2020). COVID-19 and digital inequalities: Reciprocal impacts and mitigation strategies. Computers in Human Behavior, 111. https://doi.org/10.1016/j.chb.2020.106424
Brandl, B., & Hornuf, L. (2020). Where Did FinTechs Come From, and Where Do They Go? The Transformation of the Financial Industry in Germany After Digitalization. Frontiers in Artificial Intelligence, 3. https://doi.org/10.3389/frai.2020.00008
Châlons, C., & Dufft, N. (2017). The Role of IT as an Enabler of Digital Transformation. In Management for Professionals: Vol. Part F590 (pp. 13–22). Springer Nature. https://doi.org/10.1007/978-3-319-31824-0_2
Chetty John Friedman Nathaniel Hendren Michael Stepner, R. N., Chodorow-Reich, G., Furman, J., Jaravel, X., Katz, L., Saez, E., Straub, L., Yagan, D., Bell, M., Bruich, G., Chelidze, T., Chu, L., Cineus, W., Devlin-Foltz, S., Droste, M., Felton Spence, S., Gaur, D., Gonzalez, F., Gray, R., … Zhang, R. (2020). Nber Working Paper Series How Did Covid-19 And Stabilization Policies Affect Spending And Employment? A New Real-Time Economic Tracker Based On Private Sector Data. www.tracktherecovery.org
Chishti, S., & Barberis, J. (2016). The Fintech book: The financial technology handbook for investors, entrepreneurs and visionaries. John Wiley & Sons.
Christensen, C. M. (1997). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business School Press. Boston . Massachusetts.
Jagtiani, J., & Lemieux, C. (2018). Do fintech lenders penetrate areas that are underserved by traditional banks? Journal of Economics and Business, 100, 43–54. https://doi.org/10.1016/j.jeconbus.2018.03.001
Jünger, M., & Mietzner, M. (2020). Banking goes digital: The adoption of FinTech services by German households. Finance Research Letters, 34. https://doi.org/10.1016/j.frl.2019.08.008
Hamdi, K., & Saada, M. B. (2015). The determinants of banking performance: Empirical evidence from Tunisian Listed Banks. International Journal of Finance & Banking Studies (2147-4486), 4(2), 21-28.
Kedia, N. (2016). Determinants of profitability of Indian public sector banks. Ira-International Journal of Management & Social Sciences, 2(3), 1-16. https:// doi.org/10.21013/jmss.v2.n3.p1
King, A. A., & Baatartogtokh, B. (2015). How useful is the theory of disruptive innovation?. MIT Sloan management review, 57(1), 77.. https://www.researchgate.net/publication/283877064
Lee, S. M., & Lee, D. H. (2020). “Untact”: a new customer service strategy in the digital age. In Service Business (Vol. 14, Issue 1). Springer. https://doi.org/10.1007/s11628-019-00408-2
Levin, J., & Milgrom, P. (2004). Consumer theory. Available from internet: http://web. stanford. edu/~ jdlevin/Econ, 20202.
Li, Y., Spigt, R., & Swinkels, L. (2017). The impact of FinTech start-ups on incumbent retail banks’ share prices. Financial Innovation, 3(1). https://doi.org/10.1186/s40854-017-0076-7
Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Agha, M., & Agha, R. (2020). The socio-economic implications of the coronavirus pandemic (COVID-19): A review. In International Journal of Surgery (Vol. 78, pp. 185–193). Elsevier Ltd. https://doi.org/10.1016/j.ijsu.2020.04.018
Nouaili, M., Abaoub, E., & Ochi, A. (2015). The determinants of banking performance in front of financial changes: Case of trade banks in Tunisia. International Journal of Economics and Financial Issues, 5(2), 410– 417. Retrieved from https://doi.org/21464138
Onorato, G., Pampurini, F., & Quaranta, A. G. (2023). Lending Activity Efficiency. A Comparison Between Fintech Firms And The Banking Sector. Research in International Business and Finance, 102185. https://doi.org/10.1016/j.ribaf.2023.102185
OJK, 2023a. Sadari, Amati, Ikuti Perkembangan Financial Technology, https://sikapiuangmu.ojk.go.id/FrontEnd/CMS/Article/10424.
OJK, 2023b. Siaran Pers : Kinerja Perbankan Yang Kuat Dan Stabil Dorong Optimisme Di Tengah Gejolak Global, https://ojk.go.id/id/berita-dan-kegiatan/siaran-pers/Pages/Kinerja-Perbankan-yang-Kuat-dan-Stabil-Dorong-Optimisme-di-Tengah-Gejolak-Global.aspx
Phan, D. H. B., Narayan, P. K., Rahman, R. E., & Hutabarat, A. R. (2020). Do financial technology firms influence bank performance? Pacific Basin Finance Journal, 62. https://doi.org/10.1016/j.pacfin.2019.101210
Puschmann, T. (2017). Fintech. Business and Information Systems Engineering, 59(1), 69–76. https://doi.org/10.1007/s12599-017-0464-6
Tan, Y., & Anchor, J. (2017). The impacts of risk-taking behaviour and competition on technical efficiency: Evidence from the Chinese banking industry. Research in International Business and Finance, 41, 90–104. https://doi.org/10.1016/j.ribaf.2017.04.026
Tan, Y., & Floros, C. (2018). Risk, competition and efficiency in banking: Evidence from China. Global Finance Journal, 35, 223–236. https://doi.org/10.1016/j.gfj.2017.12.001
Tiffani, I. (2023). Pengaruh Literasi Keuangan Dan Literasi Digital Terhadap Preferensi Bank Digital. MBIA, 22(1), 152–167. https://doi.org/10.33557/mbia.v22i1.2039
Utami, N. (2023). Analysis of the Use of Financial Technology and Financial Literacy Among MSMEs. MBIA, 22(1), 11–21. https://doi.org/10.33557/mbia.v22i1.2217.
Zaki, M. (2019). Digital transformation: harnessing digital technologies for the next generation of services. Journal of Services Marketing, 33(4), 429–435. https://doi.org/10.1108/JSM-01-2019-0034
Copyright Disclaimer
Copyright for this article is retained by the author(s), with first publication rights granted to the journal.
Abstract viewed = 242 times 
pdf : 145 times
Copyright (c) 2024 Bella Ananda Chairunnisa
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
MBIA Universitas Bina Darma Jalan Jend. A. Yani 13 Ulu Palembang 
MBIA by http://journal.binadarma.ac.id/index.php/mbia is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
