Abstract

Financial innovations are among the key factors that directly impact the performance of the banking sector, especially in light of the rapid developments witnessed by the global market. The period extending from 2004 to 2023 witnessed the emergence of many modern financial technologies such as financial technology (FinTech), digital banking services, and artificial intelligence, which contributed to improving the efficiency of banking operations, reducing costs, and enhancing services provided to customers. At the international level, the experiences of several countries have shown that the adoption of financial innovations led to increased competitiveness and 
improved profitability, while improving access to finance and financial security. The research is based on the hypothesis that financial innovations have an impact on banking performance. The study reached a set of results, the most important of which is that financial innovations such as digital banking services contributed to increasing financial inclusion, i.e., expanding the customer base, to include individuals who were not traditionally served, especially in developing countries, In light of this, a set of recommendations was presented, the most important of which is strengthening the regulatory framework and compliance that adapts to innovation by developing and 
implementing flexible regulatory frameworks that allow for the adoption of financial innovations while maintaining financial stability and protecting customers, enhancing governance and transparency in the use of artificial intelligence and data analysis technologies in lending, fraud, and compliance monitoring, and encouraging cooperation between regulatory bodies, banks, and financial technology (FinTech) companies through consultative platforms and live experiments (sandboxes) for innovation.