The Impact of FinTech on Economic Performance and Financial Stability in MENA Zone

Kammoun, Souhaila; Loukil, Sahar; Loukil, Youssra Ben Romdhane

doi:10.4018/978-1-7998-0039-2.ch013

Cited by 19 publications

(16 citation statements)

References 17 publications

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“…Poverty eradication could be possible when a country will experience a higher level of financial stability and economic performance. Using time-series data and deploying a multiple regression model the study of Kammoun et al (2020) shows that Fintech, even in times of political instability, accelerates financial stability and economic performance in the MENA region. In this region Fintech sector is in a booming trend where dozens of new start-ups are appearing to operate every year.…”

Section: Literature Review and Hypothesis Development A Review Of Existing Studiesmentioning

confidence: 99%

Impact of digital financial inclusion on ASEAN banking stability: implications for the post-Covid-19 era

Banna

Alam

2021

SEF

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Purpose This paper aims to investigate how digital financial inclusion (DFI) can be a potential factor to maintain banking stability in Association of Southeast Asian Nations (ASEAN) countries and whether the relationship could bring a possible implication for the post-Covid-19 pandemic era. Design/methodology/approach Using an unbalanced panel data of 213 banks of 4 ASEAN countries, the study has deployed principal component analysis, ordinary least square, two-step dynamic system generalised method of moments and panel corrected standard errors techniques. Findings The empirical study finds that the full-fledged application of DFI accelerates the ASEAN banking stability which not only decreases the default risk of the banks but also upturns the financial mobility in the region. The results also suggest that ASEAN banks are, with the implementation of DFI, likely to uphold the banking sector stability by reducing liquidity crisis and non-performing loans during and in the post-Covid-19 era. Therefore, accelerating digital finance in ASEAN countries is considered as one of the significant means for the banking sector stability that subsequently leads to economic and financial resilience even in the face of any crises. Originality/value Prevailing studies have mostly investigated the association between financial inclusion and banking stability in different contexts. However, this study is unique to empirically investigate the association between DFI and the ASEAN banking stability.

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Section: Literature Review and Hypothesis Development A Review Of Existing Studiesmentioning

confidence: 99%

Impact of digital financial inclusion on ASEAN banking stability: implications for the post-Covid-19 era

Banna

Alam

2021

SEF

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“…As banks in the current crisis are applying DFI in their transactions, the interlink between DFI and risk-taking tendency is the topic of the study. The previous research of Kammoun, Loukil, & Loukil (2020) in the context of the MENA region shows that the application of Fintech (DFI) fosters economic performance and financial stability by efficiently handling any risks and threats in the region, even in times of unrest and political instability. Full application of DFI augments the profitability of the banking sector, which ensures banking stability and minimises bank risk-taking (Ozili, 2018).…”

Section: Relevant Empirical Studiesmentioning

confidence: 99%

Does Digital Financial Inclusion Matter for Bank Risk-Taking? Evidence From the Dual-Banking System

Banna

Alam

2021

JIMF

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This paper examines the nexus between digital financial inclusion (DFI) and levels of bank risk-taking, using a sample of 283 commercial banks (Islamic and conventional) from six countries over the period 2011 to 2019 and deploying panel-corrected standard errors, two-stage least squares-instrumental variables and dynamic panel two-step generalized method of moments estimators. The findings suggest that Islamic banks take more risks than their counterpart conventional banks. The empirical evidence also indicates that an increase in the DFI index score reduces the overall level of bank risktaking and increases that of banking stability for commercial and conventional banks compared to Islamic ones. A strong association between DFI and bank risk-taking suggests that DFI not only reduces the default risk, leverage risk and portfolio risk of banks, but also increases financial mobility in the sample countries. Consequently, an inclusive digitalised banking industry ensures sustainable economic growth, which is likely to help maintain financial sustainability in times of crisis such as the Covid-19 pandemic. Our results are shown to be robust by various robustness checks. The study contributes to both the Islamic and conventional banking, as well as the digital financial inclusion, literature. The findings of the study provide various policy implications for policymakers and standard-setters in the countries examined.

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“…Islamic Fintech is different from its conventional ore inclusive, transparent, ethical, beneficial to both the parties, and ciples of sharia. Islamic Fintech is a relatively new concept and only en conducted in this regard including [26][27][28][29][30][31][32][33]. Both Fintech and Issentially same in meaning, but the difference lies in the sharia comch must comply with the principles of sharia as every Fintech based e and acceptable and it becomes unacceptable and impermissible if e that it violates the principles laid down by sharia [34].…”

Section: Introduction and Research Questionmentioning

confidence: 99%

Exploring the Role of Islamic Fintech in Combating the Aftershocks of COVID-19: The Open Social Innovation of the Islamic Financial System

Rabbani

Bashar

Nawaz

et al. 2021

Journal of Open Innovation: Technology, Market, and Complexity

107

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The purpose of the current study is to investigate the role of the Islamic financial system in recovery post-COVID-19 and the way Fintech can be utilized to combat the economic reverberations created by COVID-19. The global financial crisis of 2008 has established the credentials of the Islamic financial system as a sustainable financial system which can save the long run interests of the average citizens around the world while adding value to the real economy. The basic ethical tenets available in the Islamic financial system make it more suited and readymade to fight the economic aftershocks of a pandemic like COVID-19. The basic principles of ethical Islamic finance have solid connections to financial stability and corporate social responsibility within the wide-reaching business context. With the emergence of Financial technology (Fintech) it has provided a missing impetus to the Islamic financial system to compete on equal ground with its conventional counterpart and prove its mettle. The study uses discourse analysis along with the content analysis to extract content and draw a conclusion. The findings of the study indicate that COVID-19 pandemic has provided the opportunity for the social and open innovation to grow and finance world have turned to open innovation to provide a speedy, timely, reliable, and sustainable solution to the world. The findings of the study provide significant implications for governments and policy makers in efficient application of Fintech and innovative Islamic financial services to fight the economic consequences of the COVID-19 pandemic.

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The Impact of FinTech on Economic Performance and Financial Stability in MENA Zone

Cited by 19 publications

References 17 publications

Impact of digital financial inclusion on ASEAN banking stability: implications for the post-Covid-19 era

Impact of digital financial inclusion on ASEAN banking stability: implications for the post-Covid-19 era

Does Digital Financial Inclusion Matter for Bank Risk-Taking? Evidence From the Dual-Banking System

Exploring the Role of Islamic Fintech in Combating the Aftershocks of COVID-19: The Open Social Innovation of the Islamic Financial System

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