The Fintech Productivity Paradox in Islamic and Conventional Banking: Evidence from Bangladesh

In this study, the impact of fintech on the profitability of Islamic and conventional listed commercial banks in Bangladesh has been examined. Based on the annual report data of 36 listed banks, from 2019 to 2024, a composite Fintech Adoption Index (FAI) is created that is derived from six standardized indexes: IT investment intensity, ATM/CRM density, agent banking density, internet banking density, mobile application availability, and technology disclosure. Two-way fixedeffects and random-effects panel regressions (using Hausman test) are used to estimate the relationship between the Fintech Index and Return on Assets (ROA) and Return on Equity (ROE), then a mediation analysis is conducted on the Cost-toIncome Ratio (CIR) as a transmission channel, and a moderation analysis is conducted by adding an Islamic bank dummy and Fintech Index.