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This paper investigates the effect of FinTech on bank efficiency in the Gulf Cooperation Council (GCC) using Net Interest Income, Total Deposits, and Total Loans over a period of 8 years. The proliferation of FinTech innovations digital commerce, mobile payments, digital remittances are disrupting traditional banking models, contributing to novel dynamics in financial performance. Using a stochastic frontier analysis (SFA), the study examined the effect of FinTech on bank efficiency with respect to standard bank performance and operational indicators. The results indicate Total Loans are positively related to Net Interest Income and Total Deposits are negatively related indicating dwindling returns to deposit-based activities. In addition, findings indicate that financial technology is one of the main drivers behind the range of inefficiency in bank performance, emphasizing how important digital transformation is to financial performance. The other findings underscore that countries with a high level of adoption of FinTech in their banking sector are more efficient in generating net interest income, thus, reinforcing the need to incorporate digital solutions in the banking operations. With this, the study adds to the literature with empirical evidence from the GCC region, which has been relatively underexplored in terms of the intersection between traditional banking indicators and FinTech thereby offering valuable insights in addressing the desire to improve operational efficiency in a digitally transforming finance and banking industry.

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Financial Technology as a Factor in Increasing Bank Efficiency: Empirical Evidence from GCC Using Stochastic Frontier Analysis

  • 会议论文

  • 发表日期：

    2026年

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  • Wafa Salman,
  • Fatema Rajab,
  • Amani Al Abbas,
  • Mark Doblas,
  • Randolf Von Salindo,
  • Wendy Veeh Batar,
  • Frank Richard Paurom

摘要

This paper investigates the effect of FinTech on bank efficiency in the Gulf Cooperation Council (GCC) using Net Interest Income, Total Deposits, and Total Loans over a period of 8 years. The proliferation of FinTech innovations digital commerce, mobile payments, digital remittances are disrupting traditional banking models, contributing to novel dynamics in financial performance. Using a stochastic frontier analysis (SFA), the study examined the effect of FinTech on bank efficiency with respect to standard bank performance and operational indicators. The results indicate Total Loans are positively related to Net Interest Income and Total Deposits are negatively related indicating dwindling returns to deposit-based activities. In addition, findings indicate that financial technology is one of the main drivers behind the range of inefficiency in bank performance, emphasizing how important digital transformation is to financial performance. The other findings underscore that countries with a high level of adoption of FinTech in their banking sector are more efficient in generating net interest income, thus, reinforcing the need to incorporate digital solutions in the banking operations. With this, the study adds to the literature with empirical evidence from the GCC region, which has been relatively underexplored in terms of the intersection between traditional banking indicators and FinTech thereby offering valuable insights in addressing the desire to improve operational efficiency in a digitally transforming finance and banking industry.