Is financial technology a complement or substitute for domestic financial institutions in Ghana?

Purpose This paper aims to examine whether financial technology is complementing the performance of domestic financial institutions or substituting their performance in Ghana. Design/methodology/approach The paper used data from the Bank of Ghana Payment System Statistics and Time Series Data of the Bank of Ghana from 2012 to 2021, by using autoregressive distributive lags estimation technique. Findings The results showed that in both the long run and short run, financial technology has a significant negative impact on bank performance, indicating that fintech serves as substitutes rather than complements for Ghanaian banks. These results suggest that there must be a critical review on the interoperability policy in Ghana and that banks should take advantage of the financial technology to increase profit. Originality/value Based on the authors’ study, no empirical work has been extensively done in the Ghanaian context by examining how financial technology serves as either a complement or substitute for domestic banking institutions. This paper focuses on exploring the key definition of financial technology in Ghana and how transactions through these media are affecting or improving the performance of banks.