Does FinTech Adoption Matter for Bank Performance? Evidence From Tunisian Conventional Banks

Abstract

The purpose of this chapter is to investigate whether the financial technologies (FinTech) adoption by Tunisian conventional banks affects bank performance. As a measure of FinTech adoption, the authors used a dichotomous variable following the implementation of a collaboration with FinTech. The authors relied on a final sample of 154 bank-year observations for the period of 2009–2022. The authors find that the adoption of FinTech has a negative impact on bank financial performance. The authors’ chapter adds to the existing literature by being the first empirical evidence in the Tunisian context for the impact of FinTech adoption on bank performance. It offers some implications relevant to the debate about the consequences of FinTech adoption. Indeed, given that the effective collaboration of banks with FinTechs in the Tunisian context remains in its infancy and is constantly evolving, this could explain this negative impact. Accordingly, it is necessary to have a clear legal framework to avoid operational risks for banks collaborating with FinTechs and to take advantage of such collaboration.