The impact of Financial Technology on Commercial Banks’ Productivity Empirical Evidence from The Kingdom of Saudi Arabia
Keywords:
Commercial banks, Financial Technology, Banking productivity, Panel data modelsAbstract
The current study contributes to the empirical literature by investigating the impact of financial technology on the productivity of commercial banks for balanced annual cross-sectional data (panel data) obtained from (11) commercial banks listed on the Saudi Stock Exchange (Tadawul) during the period (2011-2020). The data envelopment analysis (DEA) method was used, which is considered one of the nonparametric methods to estimate banking productivity scores, using the (Malmquist) productivity index, which is one of the reliable measures of bank productivity. This is based on the mediation approach for input-output specifications, using multiple linear regression analysis by applying the standard (EGLS) estimator. The results showed in general that the productivity of commercial banks can be expressed as a function of many factors, including financial technology, which are important indicators for predicting bank productivity. Specifically, the results show that Automated Teller Machines (ATMs), Points of Sale (POS), in addition to the Technology and Innovation index (TI), the Number of Commercial Bank Branches (NOB), and Diversification of Income (DOI). Bank competition (HHI), and Human Capital Efficiency (HCE) are all positively and strongly related to commercial bank productivity (TFPCH).
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