From Competition to Collaboration: How Fintech Partnerships Transform Bank Performance in the Digital Age

Abstract

Purpose: In the era of rapid digital transformation, collaborations between traditional banks and fintech firms have emerged as a strategic response to innovation-driven disruption. This study investigates the impact of bank-fintech collaboration on the performance of Indian Banks moderated by bank risk-taking. Design/methodology/approach: The study utilizes unbalanced panel data from Indian banks over the period from 2015 to 2023. It employs a two-way fixed-effect regression model. Findings: The results reveal a positive association between bank-fintech collaboration and bank stability, suggesting that such partnerships may enhance resilience through technological integration and improved service efficiency. Practical implications: Policymakers and bank executives should recognize the stabilizing potential of fintech collaborations in enhancing operational efficiency, risk management, and digital adaptability. Encouraging such partnerships through supportive regulatory frameworks and targeted investments can strengthen the resilience of the Indian banking sector. Originality/ value: This study is among the first to empirically assess the dynamic effects of bank-fintech collaborations on bank performance, moderated by bank risk taking, offering fresh insights into how technology partnerships influence systemic resilience.