Analysis of the Effects of Financial Technology on the Profitability of Public and Private Banks in Iran

The development of technology has always been associated with positive effects and has significantly improved the quality of life of users. The banking industry is also inevitably affected by this development. Despite such problems as some low-speed services, a small variety of products and services, and the immense cost of providing banking services, it seems that in order to improve performance and reduce costs, it is vital to make more use of emerging financial technologies. This study, spanning from 2016 to 2020 and using the generalized method of moments, investigated the effects of the emergence of new financial technologies in banks. These technologies involve the new generation mobile applications (CDA), the open banking project (FT), the ratio of accumulated profit to income (BM), and the volume of non-performing loans (NPL) on profitability indicators such as return on equity before tax (RE) and return on assets before tax (RA). The investigation took into account both state and private banks. The results indicate that the change in the ratio of accumulated profit/loss to the total assets, the change in the use of new generation mobile application services by customers, and the time when banks started working with open banking platforms have a positive effect on the profitability index of state and private banks. The findings also show that the ratio of non- non-performing loans have a negative impact on this index. In addition, the impact of customers' use of the new generation of mobile application services and the time when banks started working with open banking platforms were greater in private banks compared to state banks