Banking financial performance in the industry financial technology era
DOI:
https://doi.org/10.15549/jeecar.v9i5.1075Keywords:
fintech, banking performance, CAR, BOPO, LDR, NIM, ROAAbstract
This study aims to analyze the financial performance of Indonesian banks based on the Capital Adequacy Ratio (CAR), Operating Costs per Operating Income (BOPO), Loan to Deposit Ratio (LDR), Net Interest Margin (NIM), Return on Assets (ROA), and Non-Performing Loans (NPL). The research method used is verification with a quantitative approach. Sources of data obtained from the bank's financial statements that have been published. The sample is grouped into state-owned banks, regional development banks, national private banks, and foreign banks. The sample is grouped into two parts, namely banking performance before and after the financial technology (fintech) regulatory family. The analysis technique used paired sample test and Wilcoxon signed-rank test. The results of the study stated that there were differences in CAR, LDR, NIM, ROA, and NPL after the ratification of fintech regulations. Meanwhile, only BOPO did not experience any difference with the issuance of fintech regulations.
References
Adam, M. H. M. (2014). Evaluating the Financial Performance of Banks using financial ratios-A case study of Erbil Bank for Investment and Finance. European Journal of Accounting Auditing and Finance Research, 2(6), 162–177.
Akhgari, M., Bruning, E. R., Finlay, J., & Bruning, N. S. (2018). Image, performance, attitudes, trust, and loyalty in financial services. International Journal of Bank Marketing. DOI: https://doi.org/10.1108/IJBM-06-2017-0118
Akhisar, I., Tunay, K. B., & Tunay, N. (2015). The effects of innovations on bank performance: The case of electronic banking services. Procedia-Social and Behavioral Sciences, 195, 369–375. DOI: https://doi.org/10.1016/j.sbspro.2015.06.336
Anagnostopoulos, I. (2018). Fintech and regtech: Impact on regulators and banks. Journal of Economics and Business, 100, 7–25. DOI: https://doi.org/10.1016/j.jeconbus.2018.07.003
Bidhari, S. C., Salim, U., Aisjah, S., & Java, E. (2013). Effect of corporate social responsibility information disclosure on financial performance and firm value in banking industry listed at Indonesia stock exchange. European Journal of Business and Management, 5(18), 39–46.
Brown, K., & Moles, P. (2014). Credit risk management. In K. Brown & P. Moles, Credit Risk Management (Vol. 16).
Budiarti, I., Hibatulloh, F., & Salman, M. (2021). Financial Technology as Payment Methods in the Digital Era. International Journal of Research and Applied Technology (INJURATECH), 1(1), 9–16. DOI: https://doi.org/10.34010/injuratech.v1i1.5454
Candraningrat, I., Abundanti, N., Mujiati, N., & Erlangga, R. (2021). The role of financial technology on development of MSMEs. Accounting, 7(1), 225–230. DOI: https://doi.org/10.5267/j.ac.2020.9.014
Cekindo Editorial Team. (2022). [2022 Updated] Important Points that You Need to Know about Fintech in Indonesia. https://www.cekindo.com/blog/fintech-indonesia
Chang, K. J., Chichernea, D. C., & HassabElnaby, H. R. (2014). On the DuPont analysis in the health care industry. Journal of Accounting and Public Policy, 33(1), 83–103. DOI: https://doi.org/10.1016/j.jaccpubpol.2013.10.002
Chiaramonte, L., & Casu, B. (2017). Capital and liquidity ratios and financial distress. Evidence from the European banking industry. The British Accounting Review, 49(2), 138–161. DOI: https://doi.org/10.1016/j.bar.2016.04.001
Cho, T.-Y., & Chen, Y.-S. (2021). The impact of financial technology on China’s banking industry: An application of the metafrontier cost Malmquist productivity index. The North American Journal of Economics and Finance, 57, 101414. DOI: https://doi.org/10.1016/j.najef.2021.101414
Conyon, M. J., & He, L. (2014). CEO turnover in China: The role of market-based and accounting performance measures. The European Journal of Finance, 20(7–9), 657–680. DOI: https://doi.org/10.1080/1351847X.2012.676559
Daryanto, W. M., & Samidi, S. (2018). Measuring the financial performance of enterprises under Ministry of Energy and Mineral Resources (EMR) an Indonesia experience. International Journal of Engineering & Technology, 7(3.21), 16–23. DOI: https://doi.org/10.14419/ijet.v7i3.21.17086
Gamayuni, R. R. (2015). The effect of intangible asset, financial performance and financial policies on the firm value. International Journal of Scientific and Technology Research, 4(1), 202–212.
Gupta, S. D., Raychaudhuri, A., & Haldar, S. K. (2018). Information technology and profitability: evidence from Indian banking sector. International Journal of Emerging Markets. DOI: https://doi.org/10.1108/IJoEM-06-2017-0211
Hadad, M. D. (2017). Financial Technology (Fintech) di Indonesia. In Kuliah Umum tentang Fintech, Indonesia Banking School.
Hamidi, H., & Safareeyeh, M. (2019). A model to analyze the effect of mobile banking adoption on customer interaction and satisfaction: A case study of m-banking in Iran. Telematics and Informatics, 38, 166–181. DOI: https://doi.org/10.1016/j.tele.2018.09.008
Haryati, S., & Kristijadi, E. (2014). The Effect of GCG Implementation and Risk Profile on Financial Performance at Go-Public National Commercial Banks. Journal of Indonesian Economy & Business, 29(3). DOI: https://doi.org/10.22146/jieb.6471
Heikal, M., Khaddafi, M., & Ummah, A. (2014). Influence analysis of return on assets (ROA), return on equity (ROE), net profit margin (NPM), debt to equity ratio (DER), and current ratio (CR), against corporate profit growth in automotive in Indonesia Stock Exchange. International Journal of Academic Research in Business and Social Sciences, 4(12), 101. DOI: https://doi.org/10.6007/IJARBSS/v4-i12/1331
Hoffni, B. (2021). Analisis Pengaruh Financial Technology Terhadap Kinerja Bank di Bursa Efek Indonesia. Universitas Gadjah Mada.
Ichsan, R., Suparmin, S., Yusuf, M., Ismal, R., & Sitompul, S. (2021). Determinant of Sharia Bank’s Financial Performance during the Covid-19 Pandemic. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 298–309. DOI: https://doi.org/10.33258/birci.v4i1.1594
Indonesia Fintech Report. (2020). Indonesia Fintech Report 2020. Fintech Singapore. https://fintechnews.sg/wp-content/uploads/2020/12/Fintech-Indonesia-Report-2020.pdf
Kang, J., Kim, K., & Henderson, W. C. (2002). Economic Value Added (EVA): a financial performance measure. Journal of Accounting and Finance Research, 10(1), 48.
Kennedy, P. S. J. (2017). Literature Review: Tantangan terhadap Ancaman Disruptif dari Financial Technology dan Peran Pemerintah dalam Menyikapinya.
Kennedy, P. S. J., & Harefa, A. A. (2018). The Financial Technology, Regulation And Banking Adaptation In Indonesia. Fundamental Management Journal, 3(1), 1–11.
Kholis, N. (2018). Perbankan dalam era baru digital. Jurnal Economicus, 9(1), 80–88. DOI: https://doi.org/10.47860/economicus.v12i1.149
Kuppusamy, M., Saleh, A. S., & Samudhram, A. (2010). Measurement of Islamic banks performance using a shariah conformity and profitability model. Review of Islamic Economics, 13(2), 35–48.
Kurniati, P. S., & Suryanto, S. (2022). The Role of the Indonesian Government in the Era of Banking Disruption Innovation. Journal of Eastern European and Central Asian Research (JEECAR), 9(1), 93–100. DOI: https://doi.org/10.15549/jeecar.v9i1.881
Madhavi, E., & Prasad, M. S. V. (2015). An Empirical Study on Economic Value-Added and Market Value-Added of Selected Indian FMCG Companies. IUP Journal of Accounting Research & Audit Practices, 14(3).
Mardiana, M., & Purnamasari, P. E. (2018). The effect of risk management on financial performance with good corporate governance as a moderation variable. Management and Economics Journal (MEC-J), 2(3), 257–268. DOI: https://doi.org/10.18860/mec-j.v0i0.5223
Micheli, P., & Manzoni, J.-F. (2010). Strategic performance measurement: Benefits, limitations and paradoxes. Long Range Planning, 43(4), 465–476. DOI: https://doi.org/10.1016/j.lrp.2009.12.004
Micu, I., & Micu, A. (2016). Financial technology (Fintech) and its implementation on the Romanian non-banking capital market. SEA-Practical Application of Science, 11, 379–384.
Mushafiq, M., Sindhu, M. I., & Sohail, M. K. (2021). Financial performance under influence of credit risk in non-financial firms: evidence from Pakistan. Journal of Economic and Administrative Sciences, ahead-of-print. DOI: https://doi.org/10.1108/JEAS-02-2021-0018
Mysaka, H., & Derun, I. (2021). Corporate Financial Performance and Tobin’s Q in Dividend and Growth Investing. Contemporary Economics, 15(3), 276–289. DOI: https://doi.org/10.5709/ce.1897-9254.449
Noor, M., Fourqoniah, F., & Aransyah, M. F. (2020). The Investigation of financial inclusions, financial literation, and financial technology in Indonesia. Jurnal Perspektif Pembiayaan Dan Pembangunan Daerah, 8(3), 257–268. DOI: https://doi.org/10.22437/ppd.v8i3.9942
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329–340. https://doi.org/10.1016/j.bir.2017.12.003 DOI: https://doi.org/10.1016/j.bir.2017.12.003
PricewaterhouseCoopers (PwC). (2016). How fintech is shaping financial service. Global FIntech Report.
Ramana, D. V. (2005). Market value added and economic value added: Some empirical evidences. 8th Capital Markets Conference, Indian Institute of Capital Markets Paper. DOI: https://doi.org/10.2139/ssrn.871404
Romanova, I., & Kudinska, M. (2016). Contempo-rary Issues in Finance: Banking and FinTech: A Challenge or Opportunity? Emerald Group Publishing Limited. DOI: https://doi.org/10.1108/S1569-375920160000098002
Rostami, M. (2015). Determination of Camels model on bank’s performance. International Journal of Multidisciplinary Research and Development, 2(10), 652–664.
Rumondang, A., Sudirman, A., Effendy, F., Sirnamata, J., & Agustin, T. (2019). Fintech: Inovasi Sistem Keuangan di Era Digital. Yayasan Kita Menulis.
Sabol, A., & Sverer, F. (2017). A review of the economic value added literature and application. UTMS Journal of Economics, 8(1), 19–27.
Sarfaraz, J. (2017). Unified theory of acceptance and use of technology (Utaut) model-mobile banking. Journal of Internet Banking and Commerce, 22(3), 1–20.
Sari, F. N., & Endri, E. (2019). Determinants of Return on Assets (ROA) On Conventional Banks Listed On Indonesian Stock Exchange (IDX) Period 2013–2017. IOSR Journal of Business and Management (IOSR-JBM), 21(4), 52–62.
Scott, S. V, Van Reenen, J., & Zachariadis, M. (2017). The long-term effect of digital innovation on bank performance: An empirical study of SWIFT adoption in financial services. Research Policy, 46(5), 984–1004. DOI: https://doi.org/10.1016/j.respol.2017.03.010
Siew, R. Y. J., Balatbat, M. C. A., & Carmichael, D. G. (2013). The relationship between sustainability practices and financial performance of construction companies. 2(1), 6–27. https://doi.org/10.1108/20466091311325827 DOI: https://doi.org/10.1108/20466091311325827
Singh, S., Chhatwal, S. S., Yahyabhoy, T. M., & Heng, Y. C. (2002). Dynamics of innovation in ebanking. ECIS 2002 PROCEEDINGS, 147. https://aisel.aisnet.org/ecis2002/147
Stulz, R. M. (2019). Fintech, bigtech, and the future of banks. Journal of Applied Corporate Finance, 31(4), 86–97. DOI: https://doi.org/10.1111/jacf.12378
Suryanto. (2015). Non performing loans on regional development bank in Indonesia and factors that influence. Mediterranean Journal of Social Sciences, 6(4). https://doi.org/10.5901/mjss.2015.v6n4p280 DOI: https://doi.org/10.5901/mjss.2015.v6n4p280
Suryanto. (2019a). Effect of internet financial reporting and company size on stock trading volume at LQ45 company in Indonesia stock exchange. Humanities and Social Sciences Reviews, 7(3), 527–533. https://doi.org/10.18510/hssr.2019.7378
Suryanto. (2019b). Effect of internet financial reporting and company size on stock trading volume at LQ45 company in Indonesia stock exchange. Humanities and Social Sciences Reviews, 7(3), 527–533. https://doi.org/10.18510/hssr.2019.7378 DOI: https://doi.org/10.18510/hssr.2019.7378
Suryanto, Rusdin, & Dai, R. M. (2020). Fintech as a catalyst for growth of micro, small, and medium enterprise in Indonesia. Academy of Strategic Management Journal, 19(5), 1–12.
Suryanto, S. (2016). Stock Valuation by Using Price Earning Ratio (PER) In Stock Index LQ45. Jurnal AdBispreneur, 1(2), 137–144. DOI: https://doi.org/10.24198/adbispreneur.v1i2.10236
Tang, N., Baker, A., & Peter, P. C. (2015). Investigating the disconnect between financial knowledge and behavior: The role of parental influence and psychological characteristics in responsible financial behaviors among young adults. Journal of Consumer Affairs, 49(2), 376–406. DOI: https://doi.org/10.1111/joca.12069
Tho’in, M. (2019). Profitability of Islamic Commercial Banks in Indonesia. IQTISHADIA Jurnal Ekonomi & Perbankan Syariah, 6(2), 89–99. DOI: https://doi.org/10.19105/iqtishadia.v6i2.2429
Tidd, J., & Bessant, J. R. (2020). Managing innovation: integrating technological, market and organizational change. John Wiley & Sons.
Tripalupi, R. I. (2019). Pengelolaan Dokumen Elektronik Layanan Jasa Keuangan Berbasis Financial Technology (Fintech). AKSY: Jurnal Ilmu Akuntansi Dan Bisnis Syariah, 1(1), 13–22.
Vivek, S. D., Beatty, S. E., & Morgan, R. M. (2012). Customer engagement: Exploring customer relationships beyond purchase. Journal of Marketing Theory and Practice, 20(2), 122–146. DOI: https://doi.org/10.2753/MTP1069-6679200201
Vives, X. (2019). Digital disruption in banking. Annual Review of Financial Economics, 11, 243–272. DOI: https://doi.org/10.1146/annurev-financial-100719-120854
Weill, P., & Woerner, S. L. (2015). Optimizing your digital business model. MIT Sloan Management Review, 53(3), 28–36. DOI: https://doi.org/10.1109/EMR.2015.7059380
Welc, J. (2022). Financial statement analysis. In Evaluating Corporate Financial Performance (pp. 131–212). Springer. DOI: https://doi.org/10.1007/978-3-030-97582-1_3
Wolfe, J., & Sauaia, A. C. A. (2003). The Tobin q as a company performance indicator. Developments in Business Simulation and Experiential Learning: Proceedings of the Annual ABSEL Conference, 30.
Zairi, M. (2012). Measuring performance for business results. Springer Science & Business Media.
Downloads
Published
How to Cite
Issue
Section
License
The JEECAR journal allows the author(s) to hold the copyright and publishing rights of their own manuscript without restrictions.
This journal applies the Creative Attribution Common License to works we publish, and allows reuse and remixing of its content, in accordance with a CC-BY 4.0 license.
Authors are free to: Share — copy and redistribute the material in any medium or format and Adapt — remix, transform, and build upon the material for any purpose, even commercially.
Under the following terms: Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
No additional restrictions — The author may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
The JEECAR Journal is committed to the editorial principles of all aspects of publication ethics and publication malpractice as assigned by the Committee on Public Ethics.