Title: The Impact of FinTech on Bank Stability and Cyber Risk in Small Developing Economies: Evidence from Jordan
Authors: Dr. Omar Mohammed
Volume: 10
Issue: 1
Pages: 195-201
Publication Date: 2026/01/28
Abstract:
With the increasing adoption of financial technologies such as mobile banking, digital payment systems, and blockchain applications, the banking sector in small developing economies is undergoing profound structural and operational transformations that generate both opportunities and emerging risks. This study examines the impact of FinTech adoption on bank stability and cyber risk in Jordan over the period from 2000 to 2024. Using a fixed-effects model, the analysis is complemented by robustness checks employing random effects, pooled ordinary least squares (OLS), and the generalized method of moments (GMM). The empirical investigation focuses on seven Jordanian financial institutions, including commercial banks and non-bank financial institutions. The study evaluates the influence of FinTech adoption while controlling for key bank-specific characteristics that may affect financial stability and exposure to cyber risk. The results reveal that FinTech adoption significantly enhances bank stability while simultaneously mitigating cyber risk, indicating a positive contribution of digital financial innovation to the resilience of the banking sector. These findings suggest that banks operating in Jordan and similar small developing economies should continue to expand their strategic investments in FinTech while strengthening cybersecurity capabilities. Furthermore, the study underscores the importance of proactive regulatory oversight and institutional frameworks to ensure that FinTech-driven transformation supports financial stability and safeguards against digital vulnerabilities.