The mediating role of fintech on ESG and bank performance

Alam, Md Ashraful; Mokhtar, Nur Badriyah

Abstract

Despite the heated debate on banking transformation, there is little research on the performance of commercial banks and how they have been affected by fintech and Environmental, Social and Governance (ESG) goals. There have been a number of recent studies on the role of ESG in the field of finance, but very less studies explores the role of fintech either directly or indirectly. To address this gap, this study uses PLS-SEM, quantitative research, and a novel framework for describing the mediating role of fintech on ESG and bank performance in European Union (EU) commercial banks. Based on our research, we find that ESG has a positive impact on bank performance. More importantly, we find that fintech has a mediating factor on ESG and bank performance. Our study suggests that banks that are more engaged in fintech perform better on measures of environment, social and governance goals, which, in turn leads to improved performance. Our findings provide information that will be of interest to financial decision makers and regulatory authorities in elucidating the impact of fintech and ESG on commercial banking.

Citation

Alam, M. A., & Mokhtar, N. B. (2023). The mediating role of fintech on ESG and bank performance. In Fintech and Sustainability (191-218). Palgrave Macmillan. https://doi.org/10.1007/978-3-031-40647-8

• Online Publication Date: Dec 6, 2023
• Publication Date: Dec 6, 2023
• Deposit Date: Dec 22, 2023
• Publicly Available Date: Dec 7, 2025
• Publisher: Palgrave Macmillan
• Pages: 191-218
• Book Title: Fintech and Sustainability
• ISBN: 978-3-031-40646-1
• DOI: https://doi.org/10.1007/978-3-031-40647-8