Impact of Fintech adoption on operating performance: a study on commercial banks in Bangladesh

Abstract

This report is a comprehensive three part study conducted as part of the internship requirement at BRAC Business School, BRAC University. The contents are organized into three chapters. The first chapter contains an overview of the work experience at the Finance and Accounts Department (FAD) of Community Bank Bangladesh PLC. Next, the second chapter provides an organizational overview of the bank. Lastly, chapter three focuses on an independent research designed to assess the impact of the adoption of financial technology solutions on the operating performance of commercial banks in Bangladesh. In the first chapter, the experiences gathered over the internship period at the FAD have been highlighted which includes accounting practices like data entry and bookkeeping, asset monitoring as well as documentation, filing and maintaining registries of bills. The second chapter then proceeds to give an overview of the company and its various departments along with the organizational practices and policies of the company. The chapter also investigates the external business environment of the company as well as its internal financial performance through various analytical frameworks such as ratio, common size and horizontal analyses of its financial statements. The third chapter consists of an extensive study which aims to understand the impact of fintech adoption on the Return on Asset ratios of banks, a key indicator of profitability. The data has been collected through secondary research from the annual reports of ten commercial banks over a period of five years. Quantitative methodology was followed to assess the econometric relationship between the variables under study using IBM SPSS software. The analysis revealed that fintech adoption has a significant impact on Return on Asset with a moderate positive correlation. The study also provides recommendations for sustainable digital growth and further reveals future research directions on the subject.