| Abstract [eng] |
Current financial markets are undergoing rapid changes driven by the development of financial technology, globalisation and the ever-changing needs of consumers, and the banking sector, as a key part of the economy, must constantly adapt to these transformations. Digitalisation processes are fundamentally changing the traditional banking business, encouraging the introduction of new technological solutions. Innovation is not only changing the delivery models of financial services, but also transforming the sources of profitability and risk management mechanisms, underlining the importance of digitisation, automation, customisation, speed and lower costs. The growing interest in financial technology services is driving investment in the financial technology sector, which has a significant impact on both financial markets and the overall economy. In this context, it becomes crucial to analyse the impact of the services of financial technology companies on the financial performance of banks. The problem of this final project stems from a debate in the academic literature, with some researchers arguing that the entry of fintech firms into the market reduces traditional banks' revenues by attracting their customers and increasing competition, while others believe that banks can ensure long-term profitability through the timely adoption of innovations and collaboration with fintech firms. Therefore, it is relevant to identify the impact of financial technology on the financial performance of the banking sector. The first part of the paper examines the importance of assessing the impact of financial technology on the financial performance of the banking sector and justifies the need for the study. The second part of the paper provides a theoretical analysis of the impact of financial technology on the financial performance of the banking sector. The third part formulates the research methodology. The fourth part develops a practical study on the impact of financial technology on the financial performance of the Lithuanian banking sector. The correlation analysis shows that there are both positive and negative correlations between financial technology indicators and the financial performance of the Lithuanian banking sector. This suggests that certain aspects of financial technology may be associated with an increase in the financial performance of the banking sector, while others, on the contrary, may be associated with a decrease in the financial performance of the banking sector. However, it is important to note that not all increases in financial performance are positive and decreases are negative, as changes in financial performance indicators are not interpreted in a straightforward manner. An exception is the NPL ratio, whose decline is considered a positive phenomenon as it reflects a more effective management of credit risk by banks. The regression analysis revealed that while the values of most financial technology indicators are increasing, the indicators reflecting the financial performance of the Lithuanian banking sector are decreasing. This trend can be explained by the fact that the increasing use of financial technology strengthens competition with traditional banks. This may lead to a loss of customers and profits for banks, which has a negative impact on their financial position. The results of the study show that the growth of financial technology has had a negative impact on the financial performance of the Lithuanian banking sector in the period from Q4 2015 to Q3 2024. |
