Board Structure and Financial Technology in Banks: Gulf Countries

Abstract

This study examines the impact of board composition on the financial technology of banks listed on the stock exchanges of the Gulf Cooperation Council (GCC) countries. The study focuses on the size of the board, the independent members, the number of board meetings, and their impact on mobile banking, automated teller machines, point-of-sale terminals, and Mada Atheer, which are used as proxies for financial technology. In addition to the Ordinary Least Squares (OLS) method, the study uses the Generalized Method of Moments (GMM) system to control the endogeneity and heteroscedasticity issues. The sample consists of all banks listed in the GCC over eleven years from 2010 to 2020. The study found that the size of the board, the independent directors, and the number of board meetings are all positively and significantly associated with banks' financial technology. Regarding the financial characteristics of banks, the study found that banks' age and financial performance are positively and significantly associated with financial technology, while financial leverage is negatively related to financial technology. The findings of this study have implications for boards of directors of banks, which should continue to invest in banks' financial technology to improve their profitability and competitiveness. KEYWORDS Banking sector, board composition, corporate governance, financial leverage, financial performance, fintech