Impact of Fintech adoption on return on equity of listed commercial banks in Vietnam

Abstract

The objective of this paper is to assess the impact of Fintech on the profitability of commercial banks in Vietnam, where quantitative evidence is limited. The research employs panel data regression methods using a dataset collected from 30 listed commercial banks over the period 2015-2024. The estimation techniques include pooled Ordinary Least Squares (OLS), the Fixed Effects Model (FEM), the Random Effects Model (REM), the Hausman specification test, and Generalized Least Squares (GLS) to ensure the reliability and robustness of the results. The regression results indicate that all Fintech-related variables have a positive and statistically significant effect on return on equity (ROE), including investment intensity (II), digital transaction volume (DS), digital banking user rate (UR), and income from digital banking service fees (DR), with significance levels ranging from 1% to 10%. Among these factors, investment intensity (II) exerts the strongest influence on ROE, highlighting the prominent role of digital transformation in enhancing bank profitability. These results imply that commercial banks should continue strengthening technological investment and integrating Fintech into their business models. At the same time, regulatory authorities are encouraged to further refine the legal framework to promote technological innovation while maintaining the stability of the financial system.