The Impact of Financial Technology on the Efficiency of Financial Performance of Libyan Banks: An Econometric Analytical Study During the Period (2017-2023)

Abstract

This study aims to measure the impact of financial technology on the financial performance efficiency of Libyan banks by analyzing the relationship between financial technology and financial performance efficiency. The study is based on monthly data covering the period from January 2017 to January 2023. A composite Financial Technology Index was constructed alongside the Financial Performance Efficiency Index, incorporating the variables of liquidity, the real exchange rate, and inflation as control variables. To analyze the relationship among the study variables, the Autoregressive Distributed Lag (ARDL) model was employed to test the existence of a long-run relationship. The results revealed a positive effect of financial technology on financial performance efficiency, as well as a positive effect of liquidity. In contrast, inflation and the real exchange rate were found to have negative effects on financial performance efficiency. Based on these findings, the study recommends that Libyan banks expand investment in financial technology infrastructure and develop digital banking services, while enhancing the security of digital transactions and protecting customer data, thereby ensuring sustainable utilization of financial technology.