The Effect of Fintech Loan Distribution, Efficiency, and Liquidity on Bank Profitability

Abstract

Purpose: This study aims to analyze Fintech loan distribution, Efficiency, and Liquidity on bank profitability. Methodology: Data analysis using Multiple Linear Regression random-effects model was carried out on all banks listed on the Indonesia Stock Exchange (IDX). Using a sample of 45 banks, with the 2019-2023 period, data management uses STATA 17. Results: The results of the study show that the variable of fintech loan distribution has no influence on profitability. This means that although fintech is rapidly growing in lending distribution, there is no strong evidence that it directly affects bank profits. Furthermore, the efficiency variable has a negative influence on the bank's progitability. This shows that the increase in operating costs affects the bank's revenue and reduces the bank's profitability. Meanwhile, the Liquidity variable shows a significant influence on Profitability. Good liquidity means that the bank has the ability to meet its short-term obligations without problems, which in turn contributes positively to the bank's profits. Limitations: The research is limited by the dynamic nature of the fintech and banking industries, where results can change with new technological developments or policies. Contribution: This research makes an important contribution to the banking industry by highlighting the need to adapt to fintech developments to maintain profitability. Novelty: This study offers new findings that are different from previous studies, especially on the effect of fintech lending on bank profitability.