xv TABLE OF CONTENTS ABSTRACT ........................................................................................................... i ABSTRAK ......................................................................................................... iii THE GUIDANCE FOR USING THE THESIS .................................................... vii STATEMENT OF AUTHORSHIP ....................................................................... xi ACKNOWLEDGEMENTS ................................................................................. xiii TABLE OF CONTENTS ...................................................................................... xv LIST OF APPENDICES ..................................................................................... xvii LIST OF FIGURES ............................................................................................. xix LIST OF TABLES ............................................................................................... xxi Chapter I Introduction ........................................................................................ 1 I.1 Background .........................................................................................1 I.2 Research objectives .............................................................................6 I.3 Research questions ..............................................................................6 I.4 Research approach and methods .........................................................6 I.5 Key assumptions and research limitations ..........................................6 I.6 Writing structure .................................................................................7 Chapter II Literature Review .............................................................................. 9 II.1 Introduction .........................................................................................9 II.2 Past Studies on Banking Performance ................................................9 II.3 Past Studies on P2P Lending ............................................................10 II.4 Past Studies on Consumer Theory ....................................................12 II.4.1 Competition Among Bank ...................................................12 II.4.2 Relationship between Fintech, P2P Lending, and Bank......14 II.5 Proposed Research ............................................................................18 Chapter III Research Methodology ..................................................................... 25 III.1 Introduction .......................................................................................25 III.2 Data Collection .................................................................................25 III.3 Research Method...............................................................................26 III.4 Data Analysis ....................................................................................30 III.4.1 Preliminary Test ..................................................................30 III.4.2 Primary Test ........................................................................31 III.4.3 Additional Test ....................................................................32 III.5 Summary ...........................................................................................33 Chapter IV Results and Analysis ........................................................................ 35 IV.1 Introduction .......................................................................................35 IV.2 Preliminary Test ................................................................................35 IV.2.1 Model Assessment ...............................................................35 IV.2.2 Descriptive Statistics ...........................................................36 IV.2.3 Correlation Matrix and Heteroscedasticity Test ..................37 IV.3 Primary Result...................................................................................38 IV.3.1 FE Panel Regression Result for P2P effects on Bank’s Profitability ..........................................................................38 IV.3.2 FE Panel Regression Result for P2P effects on Bank’s Stability................................................................................39 IV.4 Additional Test ..................................................................................41 xvi IV.4.1 Additional test: OLS Regression ......................................... 41 IV.4.2 Additional test: RE Panel Regression ................................. 43 IV.4.3 Additional test: FE Panel Regression using RROA and RROE .................................................................................. 44 IV.4.4 Additional test: two-step system GMM .............................. 45 IV.4.4 Summary of Additional test ................................................ 47 Chapter V Summary and Conclusion ................................................................. 49 V.1 Summary ........................................................................................... 49 V.2 Conclusion and Practical Implication to Relevant Stakeholder ....... 49 V.3 Limitation and Future Research ....................................................... 50 xvii LIST OF APPENDICES Appendix A Detail sample of this research ...........................................................60 xviii xix LIST OF FIGURES Figure I.1 Financing and Third Party Funds growth in Indonesian Bank ..........3 Figure I.2 Loan Accumulation growth in Indonesian P2P .................................4 Figure III.1 Research Onion (Saunder et al., 2015) ............................................27 xx xxi LIST OF TABLES Table III.1 Sample of the research .................................................................... 26 Table III.2 Measurement of Dependent Variables. .......................................... 28 Table III.3 Description of Interest and Independent Variables. ....................... 29 Table IV.5 P2P effects on Bank’s Profitability ................................................ 39 Table IV.6 P2P effects on Bank’s Stability ...................................................... 40 Table IV.7 P2P effects on Bank’s Profitability using OLS model ................... 42 Table IV.8 P2P effects on Bank’s Stability using OLS model ......................... 42 Table IV.9 P2P effects on Bank’s Profitability using RE model...................... 43 Table IV.10 P2P effects on Bank’s Stability using RE model ........................... 43 Table IV.11 P2P effects on Bank’s Risk Adjusted ROA and ROE using FE model .............................................................................................. 44 Table IV.12 P2P effects on Bank’s Profitability using GMM two step system .