The Impact of Financial Technology on Banking Financial Performance: An Analysis of Efficiency and Profitability

Abstract

This study aims to analyze the influence of the application of Financial Technology on banking financial performance, especially in the dimensions of operational efficiency and profitability. This study uses a descriptive qualitative method based on a literature study by reviewing various empirical results of the last five years from national and international sources. The results of the analysis show that FinTech has a positive influence on bank efficiency through process digitization, service automation, and the reduction of operational and administrative costs. Increased efficiency helps banks strengthen their competitiveness and expand the reach of technology-based financial services. However, FinTech's impact on profitability still shows mixed results between institutions, depending on the readiness of digital infrastructure, the quality of governance, and the adaptation strategies implemented. This research confirms that FinTech is a long-term strategic investment that plays an important role in strengthening banking resilience and performance in the era of digital transformation. These findings are expected to enrich the literature on financial innovation as well as become the basis for policy-making in the development of a sustainable banking system