The Influence of Fintech Growth on the Performance of Conventional Banks, Islamic Banks, and Rural Banks in Indonesia

DOI

10.2991/978-94-6463-839-4_16How to use a DOI?

Keywords

Fintech; Smart PLS; ROA; BOPO; Non-Performing Loan

Abstract

Since the growth of fintechs promises more inclusive financial access, they impact the financial industry. This research focused on analyzing the impact of fintech growth on the financial sector’s performance in Indonesia. The financial industry faced increasingly aggressive competition with the emergence of various fintech services as substitutes or complements, potentially affecting their financial performance. This performance is typically measured by profits, efficiency (measured by the BOPO ratio), and Non-Performing Loan (measured by the NPL ratio). The research employed the Smart PLS analysis technique, a rigorous verification method, to test the model structurally. It focused on the performance of fintech P2P lending companies, conventional banks, sharia banks, and rural banks (Bank Perkreditan Rakyat or BPR) in Indonesia between 2021 and 2023 as the unit of analysis and observation, ensuring a comprehensive and reliable study. This research finds that fintech performance significantly negatively influences the performance of Sharia banks in Indonesia due to their relative similarity in market share. Besides, a significant negative influence on the performance of rural banks occurs because fintech products, such as peer-to-peer lending and digital payment services, are technologically different but still become close substitutes for rural bank products. Lastly, an insignificant negative influence on the performance of commercial banks arises because their scale and scope are higher than the fintech ones. As a result, many fintech companies collaborate with commercial banks.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Rino Dwi Putra
AU  - Dini Wahjoe Hapsari
AU  - Dian Indah Hayati
AU  - Intan Nurbaiti Fawziah
AU  - Jaja Muhammad Zakaria
PY  - 2025
DA  - 2025/09/16
TI  - The Influence of Fintech Growth on the Performance of Conventional Banks, Islamic Banks, and Rural Banks in Indonesia
BT  - Proceedings of the 10th Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2022)
PB  - Atlantis Press
SP  - 167
EP  - 181
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-839-4_16
DO  - 10.2991/978-94-6463-839-4_16
ID  - Putra2025
ER  -