Modeling FinTech Variables on the Profitability of Banks and Financial Institutions Using a Dynamic Systems Approach
Keywords:
FinTech, bank profitability, dynamic systems approachAbstract
The present study aims to model FinTech variables and their impact on the profitability of banks and financial institutions. FinTech has become a significant factor in reducing financial intermediation, accelerating this process. Consequently, many customers have left commercial banks and turned to FinTech companies. In fact, FinTech has eliminated temporal and spatial limitations. However, these changes have not left banks unaffected, exposing them to various threats. Issues such as resource shortages, delays in collecting receivables, or even their potential loss, external threats, and competition with other banks are factors that may result from outdated banking technologies. This research adopts a dynamic systems approach, which provides a comprehensive dynamic perspective for modeling, combining quantitative and qualitative aspects to simulate a phenomenon over time. The present study is a mixed-method (qualitative and quantitative) research, which is applied in terms of its objective and descriptive-exploratory in terms of data collection method. It is conducted in two qualitative and quantitative sections. The analysis of the positive feedback loop indicates a dynamic process in which risk management and evaluation positively influence each other. Moreover, based on the research findings, FinTech has a positive impact on profitability and efficiency in the banking industry.
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