Assessing the Impact of Financial Technology on Banks: Evidence from Regression and Decision Tree Models

This study examines the transformative impact of mobile banking applications on financial institution performance through a rigorous empirical analysis of Citibank, Goldman Sachs, and Capital One. Leveraging comprehensive U.S. Securities and Exchange Commission (SEC) data spanning three decades (1993–2023), we employ econometric modeling techniques including Ordinary Least Squares regression and decision tree analysis to quantify the relationship between digital banking adoption and key financial indicators. The investigation is contextualized by an extensive review of 30 contemporary research papers and a bibliometric analysis of approximately 1,000 publications from 2014 to 2024, which identified the most prominent topics in financial technology literature. The results reveal compelling evidence that mobile banking technology functions as a significant catalyst for financial expansion. Post-implementation regression analyses demonstrate statistically significant balance sheet growth across all institutions, with mobile banking explaining 33–75% of asset variation. Notably, the analysis reveals an asymmetric impact pattern: while revenue exhibited modest positive growth (R² values of 16–17%), the more substantial explanatory power observed in asset and liability models suggests that mobile banking exerts a more profound influence on balance sheet structure than on immediate income generation. Capital One's case provides particularly instructive insights, with statistically significant improvements in profit margin (R² = 0.447) and net income (R² = 0.314) following digital transformation. Decision tree analyses further validate these findings, identifying structural breaks in financial performance trajectories coinciding precisely with mobile application deployment dates, while demonstrating reduced squared error in post-implementation periods. This research contributes to financial technology literature by establishing empirical linkages between digital banking capabilities and institutional financial performance. The findings support a platform-based growth interpretation wherein mobile banking facilitates enhanced capital accumulation through improved customer acquisition and retention mechanisms before fully monetizing these expanded relationships.