Bank efficiency in the digital age: The role of financial technology in Tanzanian banks
The global rise of financial technology offers opportunities and challenges for banking businesses, including Tanzanian banks. This study examines the influence of a bank's FinTech index on the efficiency of 30 Tanzanian commercial banks categorized as large, medium, and small from 2010–2021....
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Modern Finance Institute
2025-01-01
|
| Series: | Modern Finance |
| Subjects: | |
| Online Access: | https://mf-journal.com/article/view/218 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832590441511387136 |
|---|---|
| author | Omary Juma Ally Yusuph Kulindwa Lucas Mataba |
| author_facet | Omary Juma Ally Yusuph Kulindwa Lucas Mataba |
| author_sort | Omary Juma Ally |
| collection | DOAJ |
| description |
The global rise of financial technology offers opportunities and challenges for banking businesses, including Tanzanian banks. This study examines the influence of a bank's FinTech index on the efficiency of 30 Tanzanian commercial banks categorized as large, medium, and small from 2010–2021. Using panel data and a two-step Generalized Method of Moments (GMM) estimator, the study finds that the FinTech index measuring banks' financial technology development significantly enhances efficiency across all banks, with the largest impact on large banks due to their high financial technology development. However, medium and small banks face challenges in financial technology development, resulting in a negative relationship between the FinTech index and the efficiency of banks. The study emphasizes the need for regulatory frameworks supporting financial technology integration in the core banking systems, especially for smaller and medium banks. It highlights the importance of collaboration and risk management to enhance bank efficiency and financial stability.
|
| format | Article |
| id | doaj-art-01f80d97d7f345a8acef8898829362f6 |
| institution | Kabale University |
| issn | 2956-7742 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Modern Finance Institute |
| record_format | Article |
| series | Modern Finance |
| spelling | doaj-art-01f80d97d7f345a8acef8898829362f62025-01-23T16:40:47ZengModern Finance InstituteModern Finance2956-77422025-01-013110.61351/mf.v3i1.218Bank efficiency in the digital age: The role of financial technology in Tanzanian banksOmary Juma Ally0Yusuph Kulindwa1Lucas Mataba2Bank of Tanzania AcademyMoshi Cooperative UniversityMoshi Co-operative University The global rise of financial technology offers opportunities and challenges for banking businesses, including Tanzanian banks. This study examines the influence of a bank's FinTech index on the efficiency of 30 Tanzanian commercial banks categorized as large, medium, and small from 2010–2021. Using panel data and a two-step Generalized Method of Moments (GMM) estimator, the study finds that the FinTech index measuring banks' financial technology development significantly enhances efficiency across all banks, with the largest impact on large banks due to their high financial technology development. However, medium and small banks face challenges in financial technology development, resulting in a negative relationship between the FinTech index and the efficiency of banks. The study emphasizes the need for regulatory frameworks supporting financial technology integration in the core banking systems, especially for smaller and medium banks. It highlights the importance of collaboration and risk management to enhance bank efficiency and financial stability. https://mf-journal.com/article/view/218FinTech IndexFinancial TechnologyEfficiencyTanzanian Commercial Banks |
| spellingShingle | Omary Juma Ally Yusuph Kulindwa Lucas Mataba Bank efficiency in the digital age: The role of financial technology in Tanzanian banks Modern Finance FinTech Index Financial Technology Efficiency Tanzanian Commercial Banks |
| title | Bank efficiency in the digital age: The role of financial technology in Tanzanian banks |
| title_full | Bank efficiency in the digital age: The role of financial technology in Tanzanian banks |
| title_fullStr | Bank efficiency in the digital age: The role of financial technology in Tanzanian banks |
| title_full_unstemmed | Bank efficiency in the digital age: The role of financial technology in Tanzanian banks |
| title_short | Bank efficiency in the digital age: The role of financial technology in Tanzanian banks |
| title_sort | bank efficiency in the digital age the role of financial technology in tanzanian banks |
| topic | FinTech Index Financial Technology Efficiency Tanzanian Commercial Banks |
| url | https://mf-journal.com/article/view/218 |
| work_keys_str_mv | AT omaryjumaally bankefficiencyinthedigitalagetheroleoffinancialtechnologyintanzanianbanks AT yusuphkulindwa bankefficiencyinthedigitalagetheroleoffinancialtechnologyintanzanianbanks AT lucasmataba bankefficiencyinthedigitalagetheroleoffinancialtechnologyintanzanianbanks |