IMPACT OF ECONOMIC POLICY UNCERTAINTY, GOVERNANCE QUALITY AND BANK VARIABILITY ON FINTECH IN PAKISTAN: A QUANTILE REGRESSION APPROACH

Abstract

Motivated by the high levels of recent economic policy uncertainty, bank variability, and governance quality conditions in Pakistan, this paper investigates the impact of these factors on FinTech in Pakistani commercial banks. Using the economic policy uncertainty (EPU) index, world governance indicators (WGI), bank variability, and FinTech services in 19 Pakistani commercial banks during 2014-2020. Quantile Regression (QR) has been employed to address the nonlinear data's tail dependence issue and examine the impact on different quantiles. Quantile regression is a more effective method to separate the connection under various market conditions. The findings show that EPU and BV negatively affect FinTech services, while GQ strengthens FinTech. This empirical research has policy implications for government agencies, bankers, regulatory authorities, investors, and the State Bank of Pakistan. Our research provides insight to policymakers with several critical and noteworthy consequences and recommendations.

Keywords: FinTech, economic policy uncertainty, bank variability, governance quality, quantile regression, Pakistani commercial banks