Analyzing the Banking Sector-Fintech Companies Nexus in Jordan

Abstract

This paper presents an analytical framework that describes the nexus between the banking sector and financial technology (fintech) companies. It explains existing trends, and by collaborating with banks, the importance of fintech companies grows daily. It examines the choices that established banks will have to explore to mitigate the profitability threat. At the onset of the fintech era, many analysts discussed its disruptive potential for the financial sector. However, we expect more future debates regarding collaboration between fintech businesses and banks. The other point that is significantly essential to debate about is financial inclusion. We pick Jordan as a case study since the local fintech sector is expanding, and it acts as a gateway for the broader MENA region. First and foremost, we attempt to assess the scientific literature that examines the major components of the fintech sector. The second section of the paper discusses the evolution of the sector and the critical aspects of the methodology employed, including statistical analyses. Our findings indicated that it is preferable to rely on qualitative assessment when valuing the relationship between banking and fintech because statistical analysis might produce inconsistent and incorrect conclusions. In Jordan, we discovered that both sectors interact with one another. The study offers scientific recommendations for the banking sector and fintech companies.