Financial innovation in the finance sector and its impact on financial performance: The case of Turkey

In this study, which is "Financial Innovation in the Finance Sector and Its Impact on Financial Performance: The Case of Turkey," the financial performance of banks was investigated by focusing on the definitions of innovation, the reasons leading to innovation, the determinants of financial innovation, and the concepts of financial performance. This study it is aimed to evaluate the general situation of the banking sector in Turkey. For this purpose, monthly bank period net profit/loss, number of ATMs, POS devices, payment recording devices, and contactless payment recording device data between 2014-01 and 2022-01 periods were analyzed by econometric methods. The first stage of the research examined the stationarity structures of the variables with the ADF and PP unit root tests. Then the long run relationship between the variables was investigated with the ARDL bounds testing approach based on two different models. Empirical findings prove that net profit and ATM, net profit, and POS and contactless devices are senchronized in the long run. In this context, according to the findings obtained from the first model, in the long run, increases in the number of POS and contactless devices contribute to the net profit of banks, as well as increases in ATMs also contribute to net profit.