Abstract
FinTech importance has continuously deepened in the past few years and spread widely in a way that attracts the attention of all stakeholders: managers of the financial services, consumers, policy makers as well as the regulators. Few research and literature are available about FinTech and its adoption both by customers and financial providers in Palestine. The Palestinian Banking sector has emerged in recent years. It has a substantial Islamic share with an excellent growth forecast. The Palestinian banking sector adoption of FinTech has many advantages and opportunities to the customers, through lowered costs and convenient services, to the banking sector through improved performance, better efficiency, and customers’ retention and attraction, to the society through enhancing financial inclusion, and to the economy by enhancing participation and growth prospects.
This research addressed the phenomenon of FinTech adoption and implementation and examines it as a disruptor in the banking industry in Palestine. It was accomplished through adoption of an explanatory sequential mixed methods approach, using the quantitative and qualitative methods. Questionnaire and semi structured interviews were conducted with customers from one side, and the Palestinian Monetary Authority officials, senior bankers, experts and FinTech companies’ senior staff in Palestine from the other side.
The aim of this research is to analyse practices, explore challenges and examine potential opportunities of the FinTech implementation as a business disruptor in both Islamic and conventional banks in Palestine. To achieve the research’s aim, the following objectives have been accomplished:
• Examination of the main factors affecting FinTech implementation by both the Islamic and conventional banking industry.
• Analysis of the approaches of conventional and Islamic banks towards FinTech implementation in Palestine.
• Assessment of the current level of FinTech adoption by customers, and their motivation to use and adopt FinTech in the future.
• Proposing a FinTech implementation framework for the banking sector in Palestine in general and for the Islamic banks in particular.
The analysis of quantitative and qualitative data showed that both extended Technology Acceptance Model (TAM), and the Technological-Organizational-Environment (TOE) framework were confirmed in the Palestinian market. The proposed framework, internal external framework, inferred from TAM, TOE and literature review was also confirmed by the results. The proposed framework categorises the factors affecting the organizations into internal and external. Internal ones include the size, financials, culture, and talent availability. Whereas the external factors include customers’ care about service quality, including ease of service, usefulness, trust and brand factors, competition pressures, IT, telecommunication availability, regulatory readiness and pressures, and legal requirements and readiness.
The proposed formula that may lead to adoption and implementation of FinTech in the Palestinian market, compromised of availability of comprehensive regulatory and legal frameworks, building and expanding the ecosystem, leadership of the private sector, and collaborative FinTech governmental strategy.
Research contribution to knowledge was through theory by proposing a FinTech adoption framework, practice through proposing FinTech implementation framework, methodology through implementation of an explanatory sequential mixed methodology, and finally provision of additional source for academics and researchers. Further research fields and future works were also proposed based on the research findings.