Digital finance strategy and bank performance in emerging markets: The role of financial soundness

This study investigates the impact of digital financial technologies (FinTechs) — such as electronic clearing systems, payment cards, and e-wallets — on the financial performance of Jordanian banks amid rapid digital transformation. While prior research has acknowledged the benefits of FinTech, few studies have examined the mechanisms through which these technologies influence financial performance, particularly in emerging markets. This study addresses this gap by evaluating both the direct effects of digital technologies and their indirect effects through financial soundness as a mediating variable. Employing a descriptive-analytical quantitative approach, data were collected via a structured questionnaire from 400 financial and branch managers, with 334 valid responses analyzed. Statistical analysis using SPSS software and multiple linear regression models was used to test the proposed hypotheses. The findings reveal a significant positive influence of digital FinTechs on banks’ financial performance, both directly and indirectly through improved financial soundness, consistent with recent evidence (Baker et al., 2023; Almashhadani & Almashhadani, 2023). These results underscore the strategic importance of strengthening institutional resilience to maximize technology-driven gains. The study contributes a novel applied framework for understanding technology-performance dynamics in emerging markets and offers practical recommendations to guide digital integration while preserving financial stability.