The diffusion of financial technology-enabled innovation in GCC-listed banks and its relationship with profitability and market value
Abstract
Purpose
This study aims to examine the relationship between the diffusion of technology-enabled innovation in financial services (i.e. financial technology [FinTech]) and the financial performance, i.e. profitability and market value of the banks listed in the Gulf Cooperation Council (GCC) countries.
Design/methodology/approach
An extensive review of the literature was carried out, and a diffusion index of 73 items including was adopted to measure the level of FinTech usage or diffusion for the banks that are listed on the GCC stock exchanges. The study used return on assets (ROA) and Tobin’s Q (TQ) as proxies to measure profitability and market value, respectively.
Findings
The findings of the empirical results indicate that there is a positive relationship between FinTech implementation and market performance (TQ) in the GCC banks. The results also showed that the highest level of FinTech implementation was 79.7% by United Arab Emirates banks followed by Bahraini banks at 76.7% based on the index developed for this study.
Practical implications
This study, hence, recommends that policymakers and governments implement supportive policies and initiatives, allowing consumers to embrace technology as part of their way of life. This encourages banks and other organizations to formulate strategies that integrate technology into operations.
Originality/value
This paper offers new contributions to the GCC literature regarding financial technology and provides recommendations to the GCC financial institutions, financial markets, policymakers and governments.
Keywords
Citation
Musleh Alsartawi, A. (2024), "The diffusion of financial technology-enabled innovation in GCC-listed banks and its relationship with profitability and market value", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-01-2024-0010
Publisher
:Emerald Publishing Limited
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