| چکیده انگلیسی مقاله |
Extended Abstract
Introduction and Objectives: The emergence of financial technologies (FinTech) in recent decades has fundamentally transformed the banking industry. Through innovations such as mobile banking, blockchain, and artificial intelligence, FinTech has revolutionized traditional banking models, creating opportunities to enhance efficiency, increase transparency, and improve service quality. Simultaneously, challenges such as risk management, regulatory compliance, and increased competition have also emerged. Overall, international studies indicate that the adoption of FinTech has led to improved bank profitability and increased their competitive ability. However, in Iran, few studies have investigated the effects of FinTech on the financial performance of banks. This issue is particularly significant within the Iranian banking system, which in recent years has faced rapid technological changes and pressures from economic developments.
Methodology: This study aims to examine the effect of FinTech on the profitability of Iranian banks. Financial data from selected Iranian banks for the period 2007-2008 to 2021-2022 (1386 to 1400 in the Persian calendar) were collected and analyzed using a panel data model with a random effects approach. The dependent variable was bank profitability. Key independent variables included FinTech indicators, bank size, income diversification, and risk-taking behavior. Given the difficulties in measuring FinTech innovations, the level of FinTech interaction in Iranian banks was calculated based on objective indicators. Furthermore, Return on Assets (ROA) was used to measure profitability, which is recognized in the literature as one of the most important indicators of bank health and performance.
Results: The findings of the study reveal that the development and application of financial technologies have a significant positive effect on bank profitability. FinTech plays a major role in enhancing the financial performance of banks by improving banking processes, reducing operational risks, increasing transparency, enhancing efficiency, and optimizing services. Additionally, the results indicate that both bank size and income diversification have a significant positive relationship with profitability, acting as effective factors in reducing risk and strengthening banks’ competitive capacity. In contrast, banks’ risk-taking behavior showed a significant negative effect on profitability, underscoring the necessity for precise risk management amidst technological changes. The findings suggest that integrating FinTech into the Iranian banking system can provide a more sustainable path for enhancing bank profitability and efficiency through the development of comprehensive strategies, strengthening regulatory frameworks, and leveraging new technologies.
Discussion and Conclusion: The development of financial technologies not only increases bank productivity and profitability but also creates significant competitive advantages for banks by reducing operational risks, improving financial processes, and enhancing transparency. Furthermore, the expansion of FinTech can lead to the structural transformation and sustainability of the banking system. The adoption of tools such as encryption, automated software, and electronic systems helps banks better manage risks, accelerate loan processing procedures, and utilize intelligent algorithms to enhance risk management. This, in turn, reduces costs, increases transaction volume, strengthens customer trust, and ensures sustainable bank profitability.
Accordingly, it is recommended that banks formulate comprehensive strategies for integrating FinTech. These should include setting clear objectives, identifying and managing risks, strengthening regulatory frameworks, and ensuring compliance with regulatory requirements. The development of such frameworks will facilitate a more effective utilization of financial technology and increase the sustainability of the banking system. Therefore, this study highlights the importance of integrating modern technologies into the Iranian banking system and suggests that by developing comprehensive FinTech strategies, reinforcing regulatory frameworks, and intelligently leveraging advanced technologies, banks can elevate their productivity and profitability to a higher level. |