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Investigating the interactive effects of FinTech Innovation with Capital Adequacy Ratio and Operational Performance on Banks' Credit Risk
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Mostafa Heidari Haratemeh1   , Alireza Shirali2 |
1- Associate Professor, Naragh Branch, Islamic Azad University , heidarimu@yahoo.com
2- PhD student, Dehaghan Branch, Islamic Azad University |
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Abstract: (14 Views) |
Background and Purpose: In the context of developing FinTech innovation, the banking system's use of FinTech innovation can improve risk management capabilities and thereby reduce risk-taking. Therefore, the aim of the present study was to investigate the effect of bank FinTech innovation on credit risk-taking with the mediating role of capital adequacy ratio and operational performance.
Methodology: The research methodology is designed based on paradigmatic goals of a positive type, based on the purpose, applied, based on the nature of the data of a quantitative type, in terms of the method of data collection, documentary and descriptive-analytical. Using balanced panel data of 25 banks in the period 2012-2022, it was considered. The annual number and frequency of news related to FinTech innovation from each bank was considered as an indicator for measuring FinTech. To address possible endogenous problems, including measurement errors and omitted variables, instrumental variables (IV) and difference in differences (DID) methods were used to test the hypothesis and extract results.
Findings: From a risk control perspective, commercial banks can achieve technological spillovers by using emerging technologies, improve risk control capabilities and management efficiency through capital adequacy ratios, and consequently enhance governance and internal control, which leads to a reduction in their credit risk. Banks can also accelerate the acquisition of information by absorbing advanced technologies to assess the credit status of customers, which improves operational efficiency, which ultimately leads to a reduction in risk-taking.
Originality/Value: Financial technologies and related electronic equipment reduce the possibility of human errors in the transfer process and financial transactions, increase the transparency of the banking system in financial processes, and reduce banking costs. |
Article number: 3 |
| Keywords: Capital Adequacy Ratio Credit Risk, FinTech Innovation, Operational Performance |
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Full-Text [PDF 750 kb]
(4 Downloads)
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Article type: Research |
Subject:
Special
Received: 2025/05/11 | Accepted: 2025/08/20 | Published: 2026/01/30
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