How Environmental, Social, and Governance Mediates the Impact of FinTech Investments on Bank Performance in Gulf Countries (International Review of Management and Marketing)

Summary

• Worldwide investments in FinTech reached US $226.6 billion in 2021, driving digital financial innovation globally.p.2
• The empirical analysis examined a balanced panel dataset of 12 banks across Kuwait, Saudi Arabia, the UAE, and Qatar, generating 168 bank-year observations over 14 years from 2010 to 2023.p.5
• The sample banks recorded an average return on assets (ROA) of 0.099 with a standard deviation of 0.354, while return on equity (ROE) showed a mean of 12.70 with a standard deviation of 4.93.p.6
• Bank performance on ESG indicators averaged a score of 26.40, ranging from a minimum of 3.71 to a maximum score of 72.01 out of 100.p.6

Key insights

1. Mobile banking applications directly enhance bank ESG performance in Gulf countries.p.1
2. Higher GDP per capita exerts a positive direct impact on bank ESG performance.p.9
3. Mobile banking applications have a statistically significant positive direct impact on return on assets.p.10
4. Mobile banking applications exert a direct negative effect on bank return on equity.p.10
5. ESG performance directly exerts a significant positive impact on bank return on equity.p.10
6. ESG performance plays a significant mediating role between mobile banking applications and bank return on equity.p.10
7. ESG performance mediates the relationship between GDP per capita and return on equity at a 10% significance level.p.10
8. GDP per capita displays no statistically significant direct impact on bank return on assets or return on equity.p.10