FinTech, transparency, governance and financial inclusion: channels to sustainable development goals in Gulf Cooperation Council banking
Rihab Grassa, Florida Veljanoska, Nadia Ben Sedrine GouchaPurpose
This study aims to examine how banking digitalization and FinTech development advance the Sustainable Development Goals (SDGs) in Gulf Cooperation Council (GCC) banks, focusing on transparency, governance and financial inclusion as the channels linking FinTech to sustainability.
Design/methodology/approach
To explore the relationship between digitalization and SDGs in GCC banks, the authors construct a FinTech Engagement Index (FEI) and a Sustainability Engagement Index (SEI) for 69 GCC banks over 2020–2023. A GLS regression model estimates this relationship, controlling for bank-specific characteristics and macroeconomic conditions.
Findings
The results of this study reveal a significant positive relationship between FinTech adoption and banking sector sustainability, demonstrating that advanced digitalization enhances transparency, governance and financial inclusion while accelerating progress toward SDGs. Institutional characteristics play a meaningful role in this relationship. These results are valuable for policymakers and regulators aiming to leverage FinTech for sustainable banking development.
Practical implications
Policymakers should foster FinTech innovation while ensuring risk management and consumer protection. Bank leaders should use FinTech as a strategic sustainability tool, prioritizing digital platforms for green products, automated reporting and environmental monitoring. Legacy banks should embed sustainability into digital transformation from the outset, while GCC regulators can promote adoption through incentives such as favorable reserve requirements or expedited licensing for FinTech-linked sustainable finance products.
Social implications
Sustainable, FinTech-enabled banking advances social equity by expanding financial inclusion. Policymakers should require banks to integrate social metrics, such as microfinance, women-owned business support and community reinvestment, into sustainability frameworks and help Islamic banks translate ethical principles into measurable outcomes.
Originality/value
This paper constructs novel bank-level indices to quantify digitalization and sustainability in GCC banking, provides among the first evidence explicitly linking FinTech engagement to specific SDGs in the region and translates the findings into a regulatory framework for named GCC policymakers.