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The Effect Of Financial Innovation In The Banking System On The Quality Of Assets In The Iranian Banking Sector
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Amin Beiranvand1   , Pardis Hassanvand2 |
1- Assistant Professor of Economics, Lorestan University , beiranvand.a@lu.ac.ir
2- Master of Economics, Lorestan University |
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Abstract: (1 Views) |
The advancement of financial technologies over the past few decades has brought about various changes in the global financial industry.Given the increasing expansion of financial technology, the present study attempts to examine its impact on one of the most important challenges of the banking system, namely asset quality. The ratio of non-current claims to total facilities granted is known as an indicator for assessing the level of risk of banks in the lending process and one of the important indicators of asset quality for assessing the health of the banking system. In order to achieve the goals of the research in the first step, considering that there is no single index for financial technology, based on the field of financial technology payment, a composite index of financial technology has been made using the principal components analysis method. In the second step, using the panel data method and the GLS method, the relationship between the above-mentioned composite index and other independent variables has been analyzed on the on the asset quality ratio in 17 Iranian banks in the period of 2017-2023.The research findings indicate that financial technology has a significant negative effect on the asset quality ratio in the banks under study. The increasing trend of GDP growth rate, facility interest rate and customer deposit growth variables leads to a decrease in non-performing loans and an improvement in the quality of bank assets. Capital adequacy ratio and bank size have a significant positive effect on the quality of bank assets ratio.
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Article number: 11 |
| Keywords: Asset quality ratio, financial technology, principal component analysis, panel data |
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Full-Text [PDF 1318 kb]
(1 Downloads)
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Article type: Research |
Subject:
Special
Received: 2025/04/30 | Accepted: 2025/06/10 | Published: 2026/05/31
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