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The Impact of Financial Technology and the Application of the Foundations of Artificial Intelligence on Financial Performance
American Journal of Economics and Business Management,
Vol. 8 No. 6 (2025): June
Abstract
This research aimed to study the impact of financial technology and the application of the foundations of artificial intelligence on financial performance, by applying it to a sample of Iraqi banks. This research relied on the descriptive and explanatory approach. The research adopted a questionnaire tool to collect data from a random group of Iraqi banking sector employees from various job levels, as the number of respondents to the questionnaire reached 383 people. SPSS 25 and AMOS 24 were used to conduct all data analyses.
The study refined the scales and evaluated the construct's validity and reliability using the following methods: Cronbach's alpha coefficient for measuring validity, and Pearson's correlation coefficient between the item and the total score of the dimension toward measuring validity. The results of simple regression analyses indicate that FinTech has a positive impact on financial performance (β= 0.723, t = 18.092 and p<0.01) and this provides support for the first half “There is a statistically significant impact of FinTech on financial performance”. The results of simple regression analyses indicate that artificial intelligence has a positive impact on financial performance (β = 0.590, t = 15.292, and p < 0.01) and this supports H2 “There is a statistically significant effect of applying the foundations of artificial intelligence on financial performance.” Financial performance.” The results of multiple regression analyses also indicate that financial technology and artificial intelligence have a positive impact on financial performance (β= 0.517, t = 9.612, and p<0.01) and (β= 0.265, t = 5.480, p< 0.01) for artificial intelligence. Supporting H3: “There is a statistically significant impact of financial technology and the application of artificial intelligence principles on financial performance.” The research recommends the necessity of keeping pace with technology that will raise financial performance to the best levels and adopting the foundations of artificial intelligence that help improve performance levels. As a whole, not just financial performance.
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- 1. Ahmed, E. H. (2023). Artificial intelligence and its relationship to improving logistical performance and developing financial performance by applying it to the youth and sports directorates in North Upper Egypt Governorate. Beni Suef Journal of Physical Education and Sports Sciences, 6 (11), 180-214.
- 2. Al Khawalid A. And a refrigerator. N. (2012), Information systems based on artificial intelligence between theoretical concepts and practical applications in the economic enterprise, the Tenth National Forum on Information Systems Based on Artificial Intelligence and its Role in Making Decisions in the Economic Enterprise, Skikda University, Algeria.
- 3. Al-Qaisi. B. A. (2019). The impact of social responsibility on the financial performance of Jordanian commercial and Islamic banks, Master’s thesis, Mu’tah University, Jordan.
- 4. Asongu, S. A. (2018). Conditional determinants of mobile phones penetration and mobile banking in sub-Saharan Africa. The Journal of the Knowledge Economy, 9(1) 81–135.
- 5. Bakr, H. F. (2022). The Role of Financial Technology in Improving Bank`s Financial Performance and Financial Position (Master’s Thesis. Applied Science Private University, Amman.
- 6. Bin Nazir. n. And two inclusions. A. (2017) Monitoring the management of the Faculty for Institutional Governance and Activating Creativity, First National Conference, University of Blida, Algeria.
- 7. Burström, Thommie, Vinit Parida, Tom Lahti, and Joakim Wincent. 2021. AI-enabled business-model innovation and transformation in industrial ecosystems: A framework, model and outline for further research. Journal of Business Research 127: 85–95.
- 8. Cenni, S., Monferrà, S., Salottic, V., Sangiorgid, M., & Torluccio, G. (2015). Credit rationing and relationship lending. Does firm size matter? Journal of Banking & Finance, 53, 249–265.
- 9. Chishti, S., & Barberis, J. (2016). The Fintech book: The financial technology handbook for investors, entrepreneurs and visionaries. John Wiley & Sons.
- 10. Copeland (2018) Artificial Intelligence .WWW.britannica.com, Retrieved 2020-12-12.
- 11. Elaine R. (2017), Overview of AI and its Application Area; (2000). (Retrieved on 09/20/2020) Available: http://members.90n.at/frankstein/frankeinstein-novelhtm.
- 12. Haenlein, Michael, and Andreas Kaplan. 2019. A Brief History of Artificial Intelligence: On the Past, Present, and Future of Artificial Intelligence. California Management Review 61: 5–14.
- 13. Hannoon, A., Al-Sartawi, A. M. M., & Khalid, A. A. (2021). Relationship between financial technology and financial performance. In The big data-driven digital economy: artificial and computational intelligence (pp. 337-344). Cham: Springer International Publishing.
- 14. Henni, W., (2010). Impact of Information Technology (IT) on the Financial Performance of Jordanian Banks (Master’s Thesis). Yarmouk University,
- 15. Hu, J., Nian, Z., & Wang, X. (2019, August). Research on financial performance evaluation on artificial intelligence listed companies in China based on DEA method. In 2019 Portland International Conference on Management of Engineering and Technology (PICMET) (pp. 1-6). IEEE.
- 16. Khan, Abu Zahar, Abdul Kader, 2019, Financial Management Practices on Financialperformance, Globus An International Journal of Management & it A Refereed Research Journal, Vol. 11 , No 1.
- 17. Krulicky, T., & Horak, J. (2021). Business performance and financial health assessment through artificial intelligence. Ekonomicko-manazerske spektrum, 15(2), 38-51.
- 18. Lachuer, J., & Jabeur, S. B. (2022). Explainable artificial intelligence modeling for corporate social responsibility and financial performance. Journal of Asset Management, 23(7), 619-630.
- 19. Liberti, J. M., & Peterson, M. (2019). Information: Hard and soft. The Review of Corporate Finance Studies, 8(1), 1–41.
- 20. Mangani D, (2017), AI Application I Banking to Look out for in Next 5 Years, available at: https://www.analyticsvidhya.com/blog/2017/04/5-ai-applications-in-banking-to -look-outfor-in-next-5-years/(10/10/2020 at 7h.00)
- 21. Miller, D.D., Brown, E.W. (2018): Artificial intelligence in medical practice: the question to the answer? Am. J. Med. 131, 129–133.
- 22. Mohammed. Z.M. (2016). The role of information technology in evaluating the financial performance of insurance companies: A field study on a sample of Sudanese insurance companies (Master’s thesis). Al-Nilein University, Khartoum.
- 23. Mushtaq, R., Gull, A. A., Shahab, Y., & Derouiche, I. (2022). Do financial performance indicators predict 10-K text sentiments? An application of artificial intelligence. Research in International Business and Finance, 61, 101679.
- 24. Ottosson, F., & Westling, M. (2020). Artificial Intelligence and its Breakthrough in the Nordics: A Study of the Relationship between AI Usage and Financial Performance in the Nordic Market.
- 25. Potanin, V. V., & Sidorov, O. Y. (2020, November). The study of the relationship between stock value and financial performance of iron and steel enterprises using artificial intelligence techniques. In IOP Conference Series: Materials Science and Engineering (Vol. 966, No. 1, p. 012001). IOP Publishing.
- 26. Rahouma, Adel and Zuabit, Nour El-Din (2016). The role of internal audit in improving the financial performance of insurance companies, (Master’s thesis), Oum El Bouaghi University, Algeria.
- 27. Ratia, M., Jussi Myllärniemi, and Nina Helander. 2018. Robotic process automation-creating value by digitalizing work in the private healthcare. In Paper presented at Mindtrek ’18: Proceedings of the 22nd International Academic Mindtrek Conference, Tampere, Finland, October 10–11; pp. 222–27.
- 28. Sam, Mohd Fazli Mohd& Khudhair, Ayad Zuhair, 2019, Effect of Risk Management Practices on The Financial Performance of Commercial Banks in Iraqi, Opcion, Año 35, No.
- 29. Sharia. s. s. (2017). The impact of disclosing the dimensions of sustainability reports on the financial performance of Jordanian public shareholding industrial companies, (Master’s thesis), The Hashemite University. Jordan.
- 30. Shiyyab, F. S., Alzoubi, A. B., Obidat, Q. M., & Alshurafat, H. (2023). The Impact of Artificial Intelligence Disclosure on Financial Performance. International Journal of Financial Studies, 11(3), 115.
- 31. The Zaghul. A. (2018). The impact of management accounting systems on the financial performance of private Jordanian universities, (Master’s thesis), Yarmouk University.
References
1. Ahmed, E. H. (2023). Artificial intelligence and its relationship to improving logistical performance and developing financial performance by applying it to the youth and sports directorates in North Upper Egypt Governorate. Beni Suef Journal of Physical Education and Sports Sciences, 6 (11), 180-214.
2. Al Khawalid A. And a refrigerator. N. (2012), Information systems based on artificial intelligence between theoretical concepts and practical applications in the economic enterprise, the Tenth National Forum on Information Systems Based on Artificial Intelligence and its Role in Making Decisions in the Economic Enterprise, Skikda University, Algeria.
3. Al-Qaisi. B. A. (2019). The impact of social responsibility on the financial performance of Jordanian commercial and Islamic banks, Master’s thesis, Mu’tah University, Jordan.
4. Asongu, S. A. (2018). Conditional determinants of mobile phones penetration and mobile banking in sub-Saharan Africa. The Journal of the Knowledge Economy, 9(1) 81–135.
5. Bakr, H. F. (2022). The Role of Financial Technology in Improving Bank`s Financial Performance and Financial Position (Master’s Thesis. Applied Science Private University, Amman.
6. Bin Nazir. n. And two inclusions. A. (2017) Monitoring the management of the Faculty for Institutional Governance and Activating Creativity, First National Conference, University of Blida, Algeria.
7. Burström, Thommie, Vinit Parida, Tom Lahti, and Joakim Wincent. 2021. AI-enabled business-model innovation and transformation in industrial ecosystems: A framework, model and outline for further research. Journal of Business Research 127: 85–95.
8. Cenni, S., Monferrà, S., Salottic, V., Sangiorgid, M., & Torluccio, G. (2015). Credit rationing and relationship lending. Does firm size matter? Journal of Banking & Finance, 53, 249–265.
9. Chishti, S., & Barberis, J. (2016). The Fintech book: The financial technology handbook for investors, entrepreneurs and visionaries. John Wiley & Sons.
10. Copeland (2018) Artificial Intelligence .WWW.britannica.com, Retrieved 2020-12-12.
11. Elaine R. (2017), Overview of AI and its Application Area; (2000). (Retrieved on 09/20/2020) Available: http://members.90n.at/frankstein/frankeinstein-novelhtm.
12. Haenlein, Michael, and Andreas Kaplan. 2019. A Brief History of Artificial Intelligence: On the Past, Present, and Future of Artificial Intelligence. California Management Review 61: 5–14.
13. Hannoon, A., Al-Sartawi, A. M. M., & Khalid, A. A. (2021). Relationship between financial technology and financial performance. In The big data-driven digital economy: artificial and computational intelligence (pp. 337-344). Cham: Springer International Publishing.
14. Henni, W., (2010). Impact of Information Technology (IT) on the Financial Performance of Jordanian Banks (Master’s Thesis). Yarmouk University,
15. Hu, J., Nian, Z., & Wang, X. (2019, August). Research on financial performance evaluation on artificial intelligence listed companies in China based on DEA method. In 2019 Portland International Conference on Management of Engineering and Technology (PICMET) (pp. 1-6). IEEE.
16. Khan, Abu Zahar, Abdul Kader, 2019, Financial Management Practices on Financialperformance, Globus An International Journal of Management & it A Refereed Research Journal, Vol. 11 , No 1.
17. Krulicky, T., & Horak, J. (2021). Business performance and financial health assessment through artificial intelligence. Ekonomicko-manazerske spektrum, 15(2), 38-51.
18. Lachuer, J., & Jabeur, S. B. (2022). Explainable artificial intelligence modeling for corporate social responsibility and financial performance. Journal of Asset Management, 23(7), 619-630.
19. Liberti, J. M., & Peterson, M. (2019). Information: Hard and soft. The Review of Corporate Finance Studies, 8(1), 1–41.
20. Mangani D, (2017), AI Application I Banking to Look out for in Next 5 Years, available at: https://www.analyticsvidhya.com/blog/2017/04/5-ai-applications-in-banking-to -look-outfor-in-next-5-years/(10/10/2020 at 7h.00)
21. Miller, D.D., Brown, E.W. (2018): Artificial intelligence in medical practice: the question to the answer? Am. J. Med. 131, 129–133.
22. Mohammed. Z.M. (2016). The role of information technology in evaluating the financial performance of insurance companies: A field study on a sample of Sudanese insurance companies (Master’s thesis). Al-Nilein University, Khartoum.
23. Mushtaq, R., Gull, A. A., Shahab, Y., & Derouiche, I. (2022). Do financial performance indicators predict 10-K text sentiments? An application of artificial intelligence. Research in International Business and Finance, 61, 101679.
24. Ottosson, F., & Westling, M. (2020). Artificial Intelligence and its Breakthrough in the Nordics: A Study of the Relationship between AI Usage and Financial Performance in the Nordic Market.
25. Potanin, V. V., & Sidorov, O. Y. (2020, November). The study of the relationship between stock value and financial performance of iron and steel enterprises using artificial intelligence techniques. In IOP Conference Series: Materials Science and Engineering (Vol. 966, No. 1, p. 012001). IOP Publishing.
26. Rahouma, Adel and Zuabit, Nour El-Din (2016). The role of internal audit in improving the financial performance of insurance companies, (Master’s thesis), Oum El Bouaghi University, Algeria.
27. Ratia, M., Jussi Myllärniemi, and Nina Helander. 2018. Robotic process automation-creating value by digitalizing work in the private healthcare. In Paper presented at Mindtrek ’18: Proceedings of the 22nd International Academic Mindtrek Conference, Tampere, Finland, October 10–11; pp. 222–27.
28. Sam, Mohd Fazli Mohd& Khudhair, Ayad Zuhair, 2019, Effect of Risk Management Practices on The Financial Performance of Commercial Banks in Iraqi, Opcion, Año 35, No.
29. Sharia. s. s. (2017). The impact of disclosing the dimensions of sustainability reports on the financial performance of Jordanian public shareholding industrial companies, (Master’s thesis), The Hashemite University. Jordan.
30. Shiyyab, F. S., Alzoubi, A. B., Obidat, Q. M., & Alshurafat, H. (2023). The Impact of Artificial Intelligence Disclosure on Financial Performance. International Journal of Financial Studies, 11(3), 115.
31. The Zaghul. A. (2018). The impact of management accounting systems on the financial performance of private Jordanian universities, (Master’s thesis), Yarmouk University.