Examining the Impact of Cybersecurity Disclosure on Bank Profitability: The Moderating Role of FinTech in the Egyptian Banking Sector
This study of Egyptian banks from 2016 to 2025 reveals that while cybersecurity disclosure alone does not directly boost profitability, its positive impact is significantly amplified when combined with FinTech adoption, suggesting that digital resilience yields financial value only when supported by robust technological infrastructure.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
In the modern world, banks are no longer just buildings with vaults and tellers; they are vast digital networks that move money, store personal histories, and power the economy with a few clicks. This shift has brought incredible speed and convenience, but it has also opened a door to a new kind of danger: the cyberattack. To protect themselves, banks now talk openly about their security measures, a practice known as cybersecurity disclosure. They do this to reassure customers and regulators that their digital doors are locked tight. At the same time, these institutions are racing to adopt financial technology, or FinTech, which includes everything from mobile banking apps to automated payment systems. The big question for economists and bankers has long been whether simply talking about security or spending money on it actually makes a bank more profitable, or if it is just a necessary cost of doing business in a digital age.
A team of researchers set out to answer this question by looking closely at the Egyptian banking sector, a market that has seen rapid digital growth over the last decade. They gathered ten years of data, from 2016 to 2025, covering sixteen major commercial banks in Egypt. Their goal was to see if telling the world about security measures directly increased a bank's profits, and if using advanced technology changed that relationship. They measured profitability in three standard ways: how much profit a bank makes on its total assets, how much it earns for its shareholders, and its net profit margin. They also tracked how much each bank invested in digital tools and how often they reported on their security practices.
The researchers found that the story is more complex than simply "security equals profit." When they looked at the data, they discovered that merely disclosing cybersecurity practices did not, on its own, lead to a statistically significant increase in a bank's profitability. In other words, a bank could be very open about its security efforts, but if it did not have the right technological tools to back those efforts up, that openness did not translate into more money in the bank. This finding challenges the idea that being transparent about security is a direct path to financial success.
However, the picture changed completely when the researchers considered the role of financial technology. They found that banks that actively adopted FinTech solutions saw a clear and significant boost in their profitability. More importantly, they discovered a powerful connection between the two concepts. The study showed that financial technology acts as a catalyst. When a bank has strong digital infrastructure, its cybersecurity disclosures suddenly become much more valuable. The technology allows the bank to turn the promise of security into a real competitive advantage. It is as if cybersecurity is a seed; without the right soil and water, it does not grow, but when planted in the rich ground of advanced technology, it flourishes and produces a harvest of higher profits.
The researchers concluded that cybersecurity is not a standalone money-maker. Instead, it is a strategic capability that only reveals its full financial potential when paired with robust technological systems. For bank managers, this means that investing in security and investing in digital tools cannot be treated as separate budget items. They must be planned together. If a bank builds a strong digital foundation, its security measures will pay off in the form of better financial performance. If it does not, those security measures may remain a cost without a clear return. This insight offers a clear path forward for banks in Egypt and beyond: to maximize their profits, they must ensure their digital engines are running smoothly before they expect their security shields to generate revenue.
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