Impact of Financial Innovations on the Performance of Banks in Pakistan

The objective of this research paper is to analyze the impact of financial innovations on the performance of Banks in Pakistan. For this purpose, we used time series data for the period from 2013 to 2019. The performance of bank was taken as a dependent variable while number of ATMs, number of credit card users, number of debit card users and internet banking were taken as independent variables. Econometric techniques such as descriptive statistics, correlation analysis and ARDL Model were applied to analyze the data. The results of the study show that number of ATMs, number of credit card users, number of debit card users, and internet banking have positive and significant relationship with banking performance in Pakistan. It is concluded that financial innovations play a vital role in improving financial performance of banking sector. We suggest that policy makers should devise policies which ensure maximum use of internet banking in order to reduce the costs of banks and boost their profitability.