Abstract

Abstract

            The emergence of financial technologies within the financial system has ignited major transformation of the banking sector  obliging banks the world over to embrace service digitalization in an increasing competitive environment. This study examined the effects of fintech on the performance of Islamic banks in Africa using the secondary data of five African countries from 2013 to 2022. Results of the two-step GMM approach reveal that the use of ATM by banks negatively and significantly affects banks ROE, ROA, and net profit margin. While mobile banking is noted to positively and significantly affect the performance of Islamic banks measured using ROE, ROA, and net profit margin. The above results were supported by our robustness checks which were based on a 2SLS approach and are in line with the existing literature. Based on these results, bank managers are encouraged to: (i) adopt measures such as limiting the amount which customers may be allowed to withdraw at a time in order to reduce the negative effects emanating from the use of ATM (ii) encourage the use of mobile banking services such as mobile apps in the delivery of their services to enhance performance.