How fintech services in bank affect the debt of banks : empirical evidence from banks in asian nations

Abstract

In the banking sector, fintech technologies have grown in significance as they provide more efficient ways to engage with customers and collect hard data (i.e., codifiable information) to aid in lending choices. The development of technology, however, is in contrast to the conventional bank-firm connection, which is built on social contacts and soft data. This study looks at how fintech affects the amount of loan financing that BANKs offer. More specifically, the research objects are: bank debts and the usage of online banking applications and the scope of the data collection is on Asian countries. To test the correlation between bank debts and the use of internet banking services, we utilize the quantitative research approach of a linear regression model of panel data employing Pooled OLS, FEM, REM, GLS, and GMM methods. Our research shows that using internet banking highers bank debt, indicating that making credit decisions based on hard information increases the possibility that banks will use more debt. One important implication of our findings is that although the implication of Fintech is much convenient for banks to making lending decisions, however, banks and business owners should also strengthen their interpersonal ties to avoid disintermediation of financial services due to internet and mobile banking.