TY - JOUR
T1 - The effect of peer-to-peer lending and third-party payments on conventional commercial bank profitability in Indonesia
AU - Tobing, Jonathan Dharma Tama
AU - Wijaya, Chandra
N1 - Funding Information:
We thank Universitas Indonesia for providing financial assistance through the PITMA-B Grant and the Research Cluster of Governance and Competitiveness, Faculty of Administrative Science, Universitas Indonesia for providing supporting materials in regard to discussions and assisting us in writing this manuscript.
Publisher Copyright:
© IAEME Publication Scopus Indexed
PY - 2020/5
Y1 - 2020/5
N2 - This research aims to analyse the effect of peer-to-peer lending and third-party payments on the profitability of conventional commercial banks. This study uses a sample of 86 conventional commercial banks supervised by the Indonesia Financial Services Authority for the period of January 2017 to June 2019. In the analysis, peer-to-peer lending and third-party payments are selected as independent variables, which are measured by the volume of a transaction. As the dependent variable, profitability is measured by the capital adequacy ratio, non-performing loans, net interest margin, loan-to-deposit ratio, operating efficiency, and ln of total assets (lnTA) as a control variable measuring bank characteristics. The results of this study are that peer-to-peer lending has a negative effect on bank profitability, whereas third-party payments have a positive effect on bank profitability. In addition, bank characteristics, as calculated with lnTA, have a positive effect on bank profitability.
AB - This research aims to analyse the effect of peer-to-peer lending and third-party payments on the profitability of conventional commercial banks. This study uses a sample of 86 conventional commercial banks supervised by the Indonesia Financial Services Authority for the period of January 2017 to June 2019. In the analysis, peer-to-peer lending and third-party payments are selected as independent variables, which are measured by the volume of a transaction. As the dependent variable, profitability is measured by the capital adequacy ratio, non-performing loans, net interest margin, loan-to-deposit ratio, operating efficiency, and ln of total assets (lnTA) as a control variable measuring bank characteristics. The results of this study are that peer-to-peer lending has a negative effect on bank profitability, whereas third-party payments have a positive effect on bank profitability. In addition, bank characteristics, as calculated with lnTA, have a positive effect on bank profitability.
KW - Bank profitability
KW - Fintech
KW - Peer-to-peer lending
KW - Third-party payments
UR - http://www.scopus.com/inward/record.url?scp=85086096966&partnerID=8YFLogxK
U2 - 10.34218/IJM.11.5.2020.062
DO - 10.34218/IJM.11.5.2020.062
M3 - Article
AN - SCOPUS:85086096966
SN - 0976-6502
VL - 11
SP - 691
EP - 701
JO - International Journal of Management
JF - International Journal of Management
IS - 5
ER -