Effects of Financial Technology on the Financial Performance of Banks: Evidence From Selected Commercial Banks in Ethiopia
Year: 2025
Type: article
Abstract: Financial technology is provided as a new form of monetary service traded that merges information technology with fiscal service similar to payments, remittance, and also the management of assets. The purpose of this study is to investigate the effect of financial technology (automated teller machine, mobile banking, Internet Banking, point of sale terminals, debit cards and networked bank branch) on the financial performance of commercial banks in Ethiopia. To achieve this objective explanatory research design with a quantitative approach was used. The study fully employed secondary data from the period 2013-2022. Collected data from purposively selected 13 privately owned commercial banks audited financial statement and by using STATA software packages analyzed through descriptive statistics and regression analysis methods. The study employed a random-effect model as confirmed by the Hausman test. . The study found that point of sale terminals (β =5.14e7 prob. = 0.013), and number of internet Banking NIB (β =2.22e13 prob. = 0.051). Whereas, mobile banking (β = -1.56e13 prob. = 0.052) and networked bank branch (β = -5.29e06 prob. = 0.004) has a negative and statistically significant effect on Commercial banks’ financial performance. On the other hand, automated teller machine (β= -3.74e07 prob. = 0.456) and debit card (β = -4.38e13 prob. = 0.241) was found to be negative and statistically insignificant. Based on the findings of the study, it is safe to conclude that financial technology has a significant effect on the financial performance of commercial banks in Ethiopia.
DOI: 10.20372/nadre:8897
Author: Hassen Mohammed Reshid
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6907264341
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