The Impact of Financial Technology on Promoting the Financial Inclusion of Banks in Arab Countries

Abstract

This research highlights the importance of financial technology (FinTech) in banking by providing financial and banking services; it also tries to show the impact of such FinTech in promoting financial inclusion to deliver all financial products to a wide segment of customers of different ages and for both sexes, especially the poor. Hence, FinTech works to improve people standard of living by giving them credit at low costs as well as involving all sectors, including small and medium enterprises, with indicators of access to financing. Furthermore, whether FinTech is provided by non-financial companies, individuals or financial and banking institutions, it provides the necessary and rapid financing at the lowest profits. Lately, an emergency financing is introduced, which contributes to supporting sustainable development opportunities. This study applied the descriptive and analytical approach. It relied on revising Arabic and foreign sources and electronic websites related to the topic under study. The experience of the Arab countries has been provided to understand the obstacles they faced and how to overcome them and the opportunities that appeared in front of them. The researcher got some conclusions and recommendations that the purpose of financial inclusion is to integrate the financial excluded individuals in the official financial system. The study reported that among the difficulties faced by FinTech is the weak financial culture of the public. However, this did not stand as an obstacle; the Arab world witnessed a great development in the field of FinTech. Yet, some Arab countries had the lion share, such as the United Arab Emirates. The use of FinTech in the Arab countries faces a number of challenges, including legal, regulatory and financing related to capital. FinTech using the mobile subscribers index plays an effective role in achieving financial inclusion, through the indicators of FinTech and financial inclusion. Most Arab countries still score the lowest levels for the financial inclusion index, due to the lack of interest or development of FinTech, which negatively affects the rise in the financial inclusion index.