Fintech-based financial inclusion and bank risk-taking: Evidence from OIC countries

Banna, Hasanul and Hassan, M. Kabir and Rashid, Mamunur (2021) Fintech-based financial inclusion and bank risk-taking: Evidence from OIC countries. Journal of International Financial Markets Institutions & Money, 75. ISSN 1042-4431, DOI

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Financial inclusion has gone beyond the rhetoric surrounding social development and financial stability, but also expanding into pathos of arbitrage benefits made from cheap retail deposits by large banks and banks from technologically developed regions. This study investigates whether a higher degree of fintech-based financial inclusion (FFI) intensifies banks' risk-taking by analysing data from 534 banks from 24 OIC countries. The results indicate that higher degree of FFI controls bank's risk-taking behaviour. The nexus turns stronger in the post-industrial revolution 4.0 (IR4.0) era. Our results are robust across multiple proxies and estimation methods. We discuss how competition surrounding investing in fintech may expose the banks towards severe uncertainty.

Item Type: Article
Funders: None
Uncontrolled Keywords: Banks' risk-taking; Z-score; Fintech; Financial inclusion; Financial stability
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce > Business
Depositing User: Ms Zaharah Ramly
Date Deposited: 14 Apr 2022 00:17
Last Modified: 14 Apr 2022 00:49

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