Artificial Intelligence, Blockchain, and Financial Transformation in Arab Economies
DOI:
https://doi.org/10.56830/WRBA03202607Keywords:
Emerging Technologies, Fintech, Blockchain, Artificial Intelligence, Digital Banking, Financial Innovation, Arab EconomiesAbstract
This study examines the adoption of upcoming technologies: artificial intelligence (AI), blockchain, digital banking, and fintech, and their impacts on organizations and performance within seven Arab economies: The United Arab Emirates, Saudi Arabia, Egypt, Bahrain, Qatar, Jordan, and Morocco. Using a cross-sectional quantitative approach, primary data from 2,168 investors, fintech users, and financial services professionals were collected and subjected to multiple linear regression and diagnostic analysis in Stata 19. The research finds that the use of AI and blockchain, as well as the incorporation of big data, improves the organization and innovation of services, and that Bank-Fintech partnerships can drive large-scale digital transformation. There is a high level of variation among the countries, due to a lack of, and not the poor quality of, digital infrastructure. The enhanced regression model explained 76.7% of the variance in the outcomes of the study, with the regulatory environment being the only significant variable to be left out (p = .044). This research presents evidence-based recommendations on policy to deal with regulatory environments that include the use of sandboxes, as well as the development of national strategies with a focus on cross-border governance cooperation. To our knowledge, this study is the first of its kind to systematically evaluate multiple emerging technologies in the financial markets of the Arab World
References
1. Abdeldayem, M. M. & Aldulaimi, S. H. The dynamics of crowdfunding campaigns in the Middle East: Does social capital matter? Zb. rad. Ekon. fak. Rij. 40, 63–78 (2022). DOI: https://doi.org/10.18045/zbefri.2022.1.6
2. Abdullah, E. M. E., Rahman, A. A., Yakob, R. & Muchtar, D. Factor influencing the adoption of fintech in investment among Malaysians. J. Adv. Res. Appl. Sci. Eng. Technol. 49, 231–247 (2024). DOI: https://doi.org/10.37934/araset.49.2.231247
3. AbuRaya, R., Abdulla, Y., Kumaraswamy, S. & Ebrahim, R. FinTech global outlook and the Bahraini landscape. In Proc. 2021 Int. Conf. Decision Aid Sciences and Application (DASA) 1007–1015 (IEEE, 2021). DOI: https://doi.org/10.1109/DASA53625.2021.9682218
4. Alaassar, A., Mention, A. L. & Aas, T. H. Exploring a new incubation model for FinTechs: Regulatory sandboxes. Technovation 103, 102237 (2021).
5. Aniza, C. et al. Artificial intelligence and machine learning in financial services. Int. J. Multidiscip. Res. 11, 45–59 (2023).
6. Farhood, H. Z. H. The Effects of Fintech Adoption on Bank Profitability: Evidence from Arab Emerging Markets. Doctoral dissertation, Faculty of Graduate Studies (2024).
7. Giudici, P. Fintech risk management: A research challenge for artificial intelligence in finance. Front. Artif. Intell. 1, 1 (2018). DOI: https://doi.org/10.3389/frai.2018.00001
8. Güleç, M., Hazar, A. & Babuşcu, Ş. Trends in Fintech. In Robo-Advisors in Management 245–273 (IGI Global, 2024). DOI: https://doi.org/10.4018/979-8-3693-2849-1.ch017
9. Khan, H. U. et al. Transforming the capabilities of artificial intelligence in GCC financial sector. Wirel. Commun. Mob. Comput. 2022, 8725767 (2022). DOI: https://doi.org/10.1155/2022/8725767
10. Kismawadi, E. R. Islamic fintech: navigating the regulatory framework and promoting financial inclusion in GCC countries. J. Islam. Mark. (2024). DOI: https://doi.org/10.1108/JIMA-02-2023-0061
11. Lee, I. & Shin, Y. J. Fintech: Ecosystem, business models, investment decisions, and challenges. Bus. Horiz. 61, 35–46 (2018). DOI: https://doi.org/10.1016/j.bushor.2017.09.003
12. Lin, T. C. Artificial intelligence, finance, and the law. Fordham L. Rev. 88, 531 (2019).
13. Massaro, M. Digital transformation in the healthcare sector through blockchain technology. Technovation 120, 102386 (2021). DOI: https://doi.org/10.1016/j.technovation.2021.102386
14. Matallah, S. Rampant corruption: The dilemma facing economic diversification in oil-abundant MENA countries. Resour. Policy 75, 102541 (2022). DOI: https://doi.org/10.1016/j.resourpol.2021.102541
15. Mohamed, F. & Mohamed Akram, B. Exploring the impact of economic, social, and technological factors on sustainable entrepreneurship in Arab countries. J. Infrastruct. Policy Dev. 8, 7159 (2024). DOI: https://doi.org/10.24294/jipd.v8i10.7159
16. Pal, R. Applications of artificial intelligence in company management, e-commerce, and finance. Int. J. Multidiscip. Educ. Res. 11, 123–128 (2022).
17. Schwarcz, S. L. De-Mystifying Digital Currencies. Law Contemp. Probl. Forthcoming (2024).
18. Yamane, T. Statistics: An Introductory Analysis 2nd edn (Harper & Row, 1967).
19. Zutshi, A., Grilo, A. & Nodehi, T. The value proposition of blockchain technologies and its impact on digital platforms. Comput. Ind. Eng. 155, 107187 (2021). DOI: https://doi.org/10.1016/j.cie.2021.107187
