The impact of developments in financial technologies on the Turkish banking sector: The case of Türkiye

Financial technologies (FinTech) have improved customer experience and enhanced competitiveness in the banking sector by accelerating transaction processes. With tools such as artificial intelligence, cloud computing, and the Internet of Things, banks offer more effective solutions in data management, security, and risk analysis. These advancements support the spread of innovative services, increasing operational efficiency and positively affecting financial performance. In Turkey, the banking sector accelerates its digital transformation through FinTech, aiming for sustainable growth. FinTech applications also enable banks to respond swiftly and efficiently to customer demands. This thesis examines how developments in financial technologies impact the financial performance of the Turkish banking sector. Return on Assets (ROA) and Return on Equity (ROE) were selected as dependent variables, while independent variables included Investment Transactions, Money Transfers, Payments, Credit Card Transactions, and Other Financial Transactions. Mobile and internet banking data were used, and relationships were analyzed through the Ordinary Least Squares (OLS) method. Results indicate that investment and payment transactions have a significant negative effect on both ROA and ROE, implying these activities may reduce profitability. Conversely, money transfers and credit card transactions showed no significant impact. Other financial transactions had a positive and significant effect on ROA and a marginal effect on ROE. These findings suggest that FinTech's impact varies by transaction type and underline the strategic importance of efficiently managing investment and payment processes. Future studies are encouraged to further explore FinTech's role in operational efficiency and sector integration. Keywords: Financial Technologies (FinTech), Turkish Banking Sector, Digitalization, Financial Performance