Financial innovations and their effects on the performance of commercial banks in Turkey

Financial markets developed rapidly after the 1980s and started to operate in the international arena. With the internationalization, the modernization and restructuring process has started, especially in the banking sector, and rapidly developing technological developments have taken place in the financial markets. As a result of these technological developments, increasing competition and demand, existing institutions and organizations have left themselves to develop and renew, and new financial product and process innovations have emerged. The financial sector in Turkey has a banking-dominated structure. For this reason, low or high performance in the banking sector affects the financial system and the entire economy. In this study, financial innovations, and the effects of these innovations on commercial banks were investigated. Accordingly, the effect of financial innovation services offered by banks operating in the Turkish banking sector to their customers in the period 2013-2021 on their financial performance was examined by multiple regression analysis method. To contribute to the literature, an analysis was carried out for public-private capital banks and all banks according to capital groups. The findings obtained were evaluated in terms of return on assets and equity of banks.