Financial Technology as a Basis for Financial Inclusion and its Impact on Profitability: Evidence from Commercial Banks

Abstract

The purpose of this study was to show how financial technology tools can be used to reinforce financial inclusion indicators on the profitability indicators of a Jordanian commercial bank listed on the Amman stock exchange. Between 2010 and 2020, a quantitative and qualitative panel data set was used. The study population is represented by all the banks listed on the Amman stock exchange (n = 16). The study found that financial technology through its multitools changed the structure of the overall financial services, besides the diversity and style of financial services for the commercial banks' clients, thus reinforcing and increasing the availability for a wider social group that did not have access to that service. Further, it was found that there is a significant effect of the financial technology tools to reinforce the financial inclusion indicators over the studies' profitability indicators that include return on assets, return on equity, and earnings per share (JD). It is recommended to adopt effective and modern financial and technological strategies that provide marginalized social groups and small and medium enterprises reasonable access to the financial services and products that meet their needs, including transactions, payments, savings, credit, and insurance. Thus, getting the added value of the data and investing it to increase the financial inclusion indicators improves the profitability indicators and income for commercial banks.