The Impact of Financial Technology on Banking Sector: Evidence from Egypt

Abstract

Purpose: Financial technology is now critical for each firm to ease and simplify commercial transactions. The purpose of this study is to examine the efficiency of the banks in Egypt after the spread of FinTech. Design/Methodology/Approach: The shortage of studies in this field in Egypt is presented as the paper's concern. Financial statement data were used for a period from 2014-2020 from the CBE Egyptian bank with Fintech collaborations. Three alternative models with different input-output combinations were developed, based on production, profitability, and intermediation dimensions to evaluate the banks' efficiency using DEA technique. Findings: The results revealed that the Egyptian banks' efficiency does not relatively improved by introducing the financial technology except for deposits and total loans. Research implications: This study contributes to the literature on the adoption status of Fintech services in Egypt and its impact on the banks' efficiency. Egyptian banks need to find more innovative ways to accelerates the transforming of the Egyptian society into a non-monetary society. Originality/value: This study holds significance as it provides the empirical evidence for insufficient improving Egyptian banks' efficiency by introducing the financial technology except for deposits and total loans and the necessity to rushes the renovating of the Egyptian society into a non-monetary society as a part of the Egypt's 2030 Sustainable Development Plan.