Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Fintech Market and Relationship of The Fintech Investments to Banks Revenues: Evidence from Kazakhstan Compared with United States

Author(s): Bauyrzhan Kobadilov Nurbekovich, Galym Omarov Burkitbaevich, Dinara Yermekbayeva Dzhasuzakovna

Nowadays, banks are experiencing a period in which financial technology is changing the fundamental concepts of banking products. The first step that every bank should take is proper investment in financial technologies. Instead of Kazakhstani banks, however, it is the government that is making huge efforts to develop the FinTech market. The goal of this review paper is to evaluate the development of the FinTech market of Kazakhstan and demonstrate the inefficiency of investments for the main industry of the financial market, namely, Kazakhstani second-tier banks. Review of studies on Kazakhstan’s fintech market development made along with testing the hypothesis that government investments have no relationship with bank revenues. A relationship analysis was conducted between on the one hand “FinTech investments in Kazakhstan” and on the other hand “revenues from account management”, “Revenues from lending and financing”, “Revenues from payments”, and “Revenues from financial assets and capital markets” of the banking industry of Kazakhstan and the US. The analysis showed the weakest relationship of “FinTech investments in Kazakhstan” to “revenues from lending and financing” for Kazakhstan and equally weak relationship to “revenues from account management”, “Revenues from payments”, and “Revenues from financial assets and capital markets”. In addition, analysis shows that all four types of revenue have a strong relationship with investment for the US and correlation analysis resulted in the strongest relationship to “revenues from payments” for the US. Analysis points out positive relationship of investments to fintech market of US and reverse state for Kazakhstan. Findings: The level of penetration of FinTech in the Kazakhstani market is markedly below that of developed economies. Investments in FinTech are more income efficient for US banks than is the case with Kazakhstani banks. Kazakhstan's financial market mostly consists of commercial banks and efforts to develop the FinTech market largely sourced from the government have no relation with bank incomes.

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