The Bank of the Future, the Future of Banking - An Empirical Analysis of European Banks

Despite the conspicuous explosion of digital banking, mobile banking, fintech startups and the implications of AI adoption, there is a relative dearth of empirical studies that provide a quantitative analysis of the impact of the Fintech on banks' financial performance. Instead there is a significative literature on internet and multichannel banking and the latest studies seem to find a positive relationship with profitability. Based on this theoretical background and in-depth research – from different perspectives, considering both financial and legal implications of the phenomenon – this work provides an empirical analysis on a data panel of 38 European Banks for the period 2013-2015 (114 observations). The author presents research approach and hypotheses; then, there is a description of the data, methodology and results. Findings suggest: 1) the existence of a significant positive relationship between the technological innovation (fintech) and bank profitability; 2) the existence of a negative relationship between the number of physical branches and bank profitability. The author concludes by discussing the limitations and future research.