1
PhD Student in Finance, Islamic Azad University, Science and Research Branch
2
Master of Information Technology Engineering, Nooretouba Virtual University of Tehran
Abstract
Banks have a decisive role in governing the country and are considered as institutions that are effective in the growth and development of countries. Today, the emergence of FinTech companies, which have expanded their field of activity by entering the banking activities, has forced the banking industry to think of solutions and reactions. Hence, in this study, the effects of FinTech companies along with macroeconomic and domestic factors on the resilience of 19 Iranian banks during the period 2013-2019 have been investigated using the panel vector autoregression model. The results of this study show that there is generally a negative relationship between the shokes of FinTechs and the resilience of the banks, the intensity of which will gradually decrease, and a shocks on FinTechs will reduce the resilience index of the banks; and based on the results of the variance analysis, this effect is relatively higher compared to other variables. There is also a positive relationship between the loan loss provision and the banks’ resilience in the short term but a negative one in the long term. Generally, there is a positive relationship between the inflation and the banks’ resilience, and the inflation shocks can improve the resilience of the banking system. The reason seams to be that due to the inflation, the banks’ revenues will rise faster than their expenses, leading to an increase in the net profit margins.
Jahangard Esfandiar, Sohrabivafa Hossein, and Keramatfar Mahdi (2017), “The Effect of Macroeconomic Variables on Bank’s Resilience with Emphasis on the Concept of Capital Adequacy, Economics and Modern Trade”, Institute of Humanities and Cultural Studies, 12th Year, No. 1, Spring 1-29.
Sepehrdoost Hamid and Aieni Tayebeh (2013), “A Study of Factors Affecting the Capital Adequacy Ratio in Iranian Banks during 2006-2010”, Financial Accounting Research, 4 (18), 35-50.
Ghiasvand Abolfazl and Abdolshah Fatemeh (2015), “The concept and evaluation of economic resilience in Iran”, Quarterly Journal of Economic Research, 15 (59), 161-178.
Mehregan Nader, Ahmadi Qomi Mohammad Ali (2015), “Currency Shocks and Financial Markets: An Application of Self-Regression Vector Model (VAR Panel)”, Quarterly Journal of Economic Research and Policies, 23rd Year, No. 75, pp. 103-130.
Aaker, D., Keller, K., (1990) Consumer evaluations of brand extensions, Journal of Marketing, 54(1), 27–41.
Abrigo MRM, Love I. Estimation of Panel Vector Autoregression in Stata. The Stata Journal. 2016;16(3):778-804. doi:10.1177/1536867X1601600314.
Arellano, M.; Bond, S.R. (1991), “Some tests of specification for panel data: Monte Carlo Evidence and an application to employment equations”, Review of economic studies, Vol. 58, PP. 277-297.
Athanasoglou, P.P., Brissimis, S.N., Delis, M.D., (2008) Bank-specific, industry-specific and macroeconomic determinants of bank profitability, Journal of International Financial Markets, Institutions and Money, 18, 121-136.
Baltagi, B. H. (2008). Econometric analysis of panel data. Chichester: John Wiley & Sons Ltd.
Bank Users: An Empirical Examination with an Extended Technology Acceptance Model. Symmetry. 2019;11:340. doi:10.3390/sym11030340.
Bank of England. (2014). ‘Why is the UK financial system so big, and is that a problem?London: Bank of England.
Berg, T. O. (2013), “Cross-country evidence on the relation between stock prices and the current account”, Applied Economics, Vol. 45 (16), PP. 2267-2277.
Betty, A., Liao, S., (2011) Do delays in expected loss recognition affect banks' willingness to lend? Journal of Accounting and Economics, 52 (1), 1-20.
Bond, S. (2002). Dynamic panel models: a guide to micro data methods and practice. Institute for Fiscal Studies, Department of Economics, UCL, CEMMAP (Centre for Microdata Methods and practice) Working Paper. CWPO9/02. Available online: http://cemmap.ifs.org.uk/wps/cwp0209.pdf.
Boorman Jack, JoséFajgenbaum, HervéFerhani, ManuBhaskharan, DrewArnold, Harpaul Alberto Kohli. (2013), The Centennial Resilience Index: Measuring Countries’ Resilience to Shock, Global Journal of Emerging Market Economies, 5(2), 57-98.
Bharadwaj A, El Sawy OA, Pavlou PA, Venkatraman N. Digital business strategy: Toward a next generation of insights. MIS quarterly. 2013:471–82.
Boorman Jack, JoséFajgenbaum, HervéFerhani, ManuBhaskharan, DrewArnold, Harpaul Alberto Kohli. (2013), The Centennial Resilience Index: Measuring Countries’ Resilience to Shock, Global Journal of Emerging Market Economies, 5(2), 57-98.
Brandl, B., Hornuf, L., (2017) Where did FinTechs come from, and where do they go? The transformation of the financial industry in Germany after digitalization, Working paper, University of Jena and University of Bremen.
Canova, F.; Ciccarelli, M. (2013), “Panel vector autoregressive models: A survey”, Advances in econometrics, Vol. 32, PP. 205-246.
hâlons C, Dufft N. The role of IT as an enabler of digital transformation. In: The drivers of digital transformation: Springer; 2017. p. 13–22.
Chishti S, Barberis J. The fintech book. 1st ed. Hoboken, New Jersey: John Wiley & Sons; 2016.
Christensen, C., (1997) The innovator's dilemma: when new technologies cause great firms to fail, Harvard Business Review Press, Boston.
Cumming, D., Schwienbacher, A., (2016) Fintech venture capital, Florida Atlantic University and SKEMA Business School, Working paper.
Freixas, Xavier and Jean-Charles Rochet, 2008, Microeconomics of Banking, 2nd edition, Cambridge, Mass: MIT Press.
Dietrich, A., Wanzenried, G., (2014) The determinants of commercial banking profitability in low- middle-, and high-income countries, The Quarterly Review of Economics and Finance, 54,337-354.
Haddad, C., Hornuf, L., (2018) The emergence of the global fintech market: Economic and technological determinants, Small Business Economics, DOI: https://doi.org/10.1007/s11187-018-9991-x.
Hannan, T.H., McDowell, J.M., (1984) The determinants of technology adoption: The case of the banking firm, The RAND Journal of Economics, 15(3), 328–335.
Holtz-Eakin, D.; Newey, W.K.; Rosen, H. S. (1988), “Estimating Vector Autoregressions with panel data”, Econometrica, Vol. 56, PP. 1371-1395.
Jagtiani J, John K. Fintech: The Impact on Consumers and Regulatory Responses. Journal of Economics and Business. 2018;100:1–6. doi:10.1016/j.jeconbus.2018.11.002.
Jagtiani, J., and Lemieux, C., (2018) Do fintech lenders penetrate areas that are underserved by traditional banks? Journal of Economics and Business, 100, 43-54.
Laven, M., Bruggink, D., (2016) How FinTech is transforming the way money moves around the world: An interview with Mike Laven, Journal of Payments Strategy & Systems, 10(1), 6–12.
Levin, Andrew, Lin, Chien-Fu and James Chu, Chia-Shang, (2002), Unit root tests in panel data: asymptotic and finite-sample properties, Journal of Econometrics, 108, issue 1, p. 1-24, https://EconPapers.repec.org/RePEc:eee:econom:v:108:y:2002:i:1:p:1-24.
, Y., Spigt, R., Swinkels, L., (2017) The impact of FinTech start-ups on incumbent retail banks’ share price, Financial Innovation, DOI:https://doi.org/10.1186/s40854-017-0076-7.
Saona, P. (2016). Intra-and extra-bank determinants of Latin American Banks' profitability. International Review of Economics & Finance, 45, 197-214
Pasiouras, F., Kosmidou, K., (2007) Factors influencing the profitability of domestic and foreign commercial banks in the European Union, Research in International Business and Finance, 21(2), 222–237.
Puschmann, T., (2017) Fintech, Business & Information Systems Engineering, 59(1), 69–76.
Ryu H-S. What makes users willing or hesitant to use Fintech?: The moderating effect of user type. Industrial Management & Data Systems. 2018;118:541–69.
Talavera, O., Yin, S., Zhang, M., (2018) Age diversity, directors' personal values, and bank performance, International Review of Financial Analysis, 55, 60-79.
Tarus, D. K., Chekol, Y. B., & Mutwol, M. (2012). Determinants of net interest margins of commercial banks in Kenya: a panel study. Procedia Economics and Finance, 2(0), 199-208.
Thakor, A., (1987) Discussion, Journal of Finance, 42(3), 661–663.
Tornjanski V, Marinković S, Săvoiu G, Čudanov M. A need for research focus shift: Banking industry in the age of digital disruption. Econophysics, Sociophysics & Other Multidisciplinary Sciences Journal (ESMSJ). 2015;5:11–5.
Veit D, Clemons E, Benlian A, Buxmann P, Hess T, Kundisch D, et al. Business models. Business & Information Systems Engineering. 2014;6:45–53.
Villeroy de Galhau, F., (2016) Constructing the possible trinity of innovation, stability and regulation for digital finance, Financial Stability Review, 20, 7-16.
Bagheri Mazraeh,N , Nejad Falatouri Moghaddam,M and Yousefi,D . (2024). Investigating the Factors Affecting Banks’ Resilience with an Emphasis on FinTech Companies. International Journal of Financial Technology Perspective, 1(1), 61-72.
MLA
Bagheri Mazraeh,N , , Nejad Falatouri Moghaddam,M , and Yousefi,D . "Investigating the Factors Affecting Banks’ Resilience with an Emphasis on FinTech Companies", International Journal of Financial Technology Perspective, 1, 1, 2024, 61-72.
HARVARD
Bagheri Mazraeh N, Nejad Falatouri Moghaddam M, Yousefi D. (2024). 'Investigating the Factors Affecting Banks’ Resilience with an Emphasis on FinTech Companies', International Journal of Financial Technology Perspective, 1(1), pp. 61-72.
CHICAGO
N Bagheri Mazraeh, M Nejad Falatouri Moghaddam and D Yousefi, "Investigating the Factors Affecting Banks’ Resilience with an Emphasis on FinTech Companies," International Journal of Financial Technology Perspective, 1 1 (2024): 61-72,
VANCOUVER
Bagheri Mazraeh N, Nejad Falatouri Moghaddam M, Yousefi D. Investigating the Factors Affecting Banks’ Resilience with an Emphasis on FinTech Companies. IJFTP. 2024;1(1):61-72.
