The effect of corporate governance, risk and ESG towards bank performance: does Fintech matter?

Binti mokhtar, N ORCID: 2022, The effect of corporate governance, risk and ESG towards bank performance: does Fintech matter? , PhD thesis, University of Salford.

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This thesis examines how corporate governance, risk, and ESG affect bank performance and provides a novel theoretical framework for incorporating fintech into the relationship in the context of EU banks. The banking sector is transitioning to become increasingly digitised. Corporate governance, risk, and ESG management in banking are changing, and fintech involvement is currently popular on the market. First, the study identifies a positive significant relationship between corporate governance and bank performance. It demonstrates how improved corporate governance can boost bank performance and how, in accordance with Agency Theory, improved governance will prevent the agency problem in banks. Additionally, the results suggested that fintech acts as a moderator to enhance the relationship. Second, the study find that bank risk negatively affects bank performance, suggesting that performance would decrease as risk rises. Furthermore, it was demonstrated that fintech has a moderating impact on the relationship between risk and bank performance. It demonstrates how fintech intervention helps banks improve risk management by minimising and controlling the risk, in line with the Consumer Theory's suggestion that an initiative like fintech or the enhancement of existing products and services, improvement of operations to minimise risk, improved performance in banks. Third, it has been discovered that ESG has a positive impact on bank performance, suggesting that implementing more robust ESG practises will improve bank performance. According to the Theory of Stakeholders, it is the obligation of a bank to add value for its stakeholders, and one way to do this is through ESG. Additionally, it was concluded that fintech mediates the link between ESG and bank performance. This indicates that banks with higher fintech engagement have better ESG results, which has indirectly boosted performance. Secondary data for the analysis was gathered from a variety of sources, including Orbis Bank Focus, Refinitiv data stream, annual financial reports, the World Bank's Development Indicators, Worldwide Governance Indicators, and CrunchBase (CB). The analysis included both static and dynamic panel data approaches, including the fundamental Partial Least Square-Structural Equation Model (PLS SEM), the second generation of data analysis, and Ordinary Least Square (OLS) for robustness. This study will be useful to a wide range of stakeholders, including investors and managers, lenders, and policymakers in the EU region and around the world. It will also provide academicians and researchers with future research directions in the banking and fintech fields.

Item Type: Thesis (PhD)
Contributors: Alam, A (Supervisor)
Schools: Schools > Salford Business School
Depositing User: NUR BADRIYAH Binti mokhtar
Date Deposited: 02 Feb 2023 11:45
Last Modified: 02 Mar 2023 02:30

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