Impact of esg score and fintech on bank performance

Abstract

In today's rapidly evolving scientific and technological landscape, businesses, including banks, need to develop timely strategies to adapt to these rapid changes. One of the attractive goals that many foreign enterprises have been pursuing is sustainable growth. Investing in ESG alongside the application of Fintech technology in banking operations will contribute to enhancing the operational efficiency and productivity of banks, leveraging the full potential of technological advancements towards broader goals of sustainable growth. The research study investigated whether Fintech technology and ESG scores truly impact the operational efficiency of a bank through indicators such as Tobin’s Q, ROA, and ROE. The research sample was collected from banks across various countries worldwide, including 31 countries, with 1498 observations over the period from 2016 to 2022, divided into two periods before and after the COVID-19 pandemic to compare the differences between these two periods. This study was conducted using quantitative methods, and the results showed that Fintech and ESG scores have a positive impact on the operational efficiency of banks. As a result, recommendations were made to address the gaps identified in previous studies, contributing to the field of research on Fintech and ESG in enhancing the operational efficiency of banks.