Business Models in European Banking: A Pre-and Post-Crisis Screening

Ayadi, Rym; Arbak, Emrah; Groen, Willem Pieter De

doi:10.2139/ssrn.1945779

Cited by 70 publications

(66 citation statements)

References 63 publications

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“…Each of these takes a local maxium/minimum at this value. In practice, experts consider between five and up to more than ten different bank business models; see, for example, Ayadi, Arbak, and de Groen (2011) and Bankscope (2014, p. 299). With these considerations in mind, to be conservative and in line with Table 2 and the simulation results as reported in Web Appendix B, we choose J = 6 components for our subsequent empirical analysis.…”

Section: Model Selectionmentioning

confidence: 99%

“…Roengpitya, Tarashev, and Tsatsaronis (2014), Ayadi, Arbak, and de Groen (2011), and Ayadi and de Groen (2015) also used cluster analysis to identify bank business models. Conditional on the identified clusters, the authors discussed bank profitability trends over time, study banking sector risks and their mitigation, and consider changes in banks' business models in response to new regulation.…”

Section: Introductionmentioning

confidence: 99%

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Bank Business Models at Zero Interest Rates

Lucas

Schaumburg

Schwaab

2018

Journal of Business & Economic Statistics

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We propose a novel observation-driven finite mixture model for the study of banking data. The model accommodates time-varying component means and covariance matrices, normal and Student's t distributed mixtures, and economic determinants of time-varying parameters. Monte Carlo experiments suggest that units of interest can be classified reliably into distinct components in a variety of settings. In an empirical study of 208 European banks between 2008Q1-2015Q4, we identify six business model components and discuss how their properties evolve over time. Changes in the yield curve predict changes in average business model characteristics.

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Section: Model Selectionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Bank Business Models at Zero Interest Rates

Lucas

Schaumburg

Schwaab

2018

Journal of Business & Economic Statistics

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“…In particular, the ECB study on business models published in the Special Features section of the Financial Stability Review (2016) is an empirical analysis on Banking Business Models (BBMs). Nevertheless, the most referenced studies on BBMs are those redacted by Ayadi et al (2011Ayadi et al ( ) (2012 (2014) (2015) with the aim of identifying the exact number and composition of different Banking Business Models in the European environment. Ayadi's papers aim at spotting the different BBMs based on the nature and scope of banks' funding strategies and the performed activities by employing statistical procedures.…”

Section: Box 1 Business Models In a Nutshell: A Bank Perspectivementioning

confidence: 99%

Banks and Fintechs: How to Develop a Digital Open Banking Approach for the Bank’s Future

Omarini¹

2018

IBR

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Mutated market conditions, the advent of new players and digital technologies, and a significant regulatory push, are profoundly changing the banking industry. Banking business models may shift significantly from a pipeline, vertical, paradigm, to open banking models where modularity can be an opportunity for banks. Not only are the abovementioned factors representing a threat to the traditional model, but also they are spurring significant new opportunities to pursue new revenue streams. Those opportunities are exploited through new banking paradigms that entail higher levels of openness towards third parties and a crescent number of modular services bundled together. Models can go to mere compliance with the prescriptions of openness of PSD2, to the inclusion of new services, the opening of the banking core and data, and the aggregation of those within a platform experience. Value is created in platforms through economies of scope in production and innovation. This paper has explored the evolution of Fintech and Techfin in the market and the emergence of platform models in banking. It has investigated the evolution of that concept, also introducing an interesting banking case (BBVA), which gives several insights on the choices made toward a Banking-as-a-Platform model within the context of Fintech and Open Banking.

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“…The performance and efficiency of the banking sector has a major impact on a country´s overall efficiency and economic performance. Therefore the banking sector´s role has increased and is still increasing in countries' economies generally (Ayadi, Arbak, & De Groen, 2011).…”

Section: A Financial Market and The Banking Industrymentioning

confidence: 99%

“…For example, in 2010 the US banking sector's assets were only 80% of US GDP and in Japan the banking sector's assets were 174% of Japanese GDP (European Banking Federation, 2011). The 26 largest banks and banking groups accounted for 55% of the total EU banking assets (Ayadi et al, 2011). This means that the European banking market is very concentrated.…”

Section: A Financial Market and The Banking Industrymentioning

confidence: 99%

Shaping Elements while Maintaining Fit

Ritakallio

Vuori

2015

AMPROC

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ISBN 978-952-60-7023-0 (printed) AbstractOrganizational performance is a result of doing many activities well and consistently with one another. While existing research has recognized that the fit between organizational activities is an important determinant of success, there is a need for more study of the processes that organizations use to develop and maintain fit in the presence of environmental change. This thesis set out to elaborate theory on fit development. I used the previous theory as a starting point and to formulate open-ended research questions rather than specific hypotheses. I then used empirical material to build on top of the prior literature and to challenge the prior literature. I did this to extend and refine the existing theories on fit development. To investigate how strategic fit is developed over time and how emergent and behavioral processes might be related to the process of developing and maintaining fit between organizational elements, I conducted a longitudinal case study of one of the most successful European banks covering its performance from 2000 to 2011. I modeled the organization´s activities by using qualitative organizational-system maps to determine how the activities evolved over time and how the fit between them was maintained. My primary data source was public information about the company´s activities and these data were complemented by private interviews.In contrast to what the previous theory would suggest, I found that the company´s core elements themselves underwent major changes through a process that I call shaping, during which the elements´ relationships between one another continued to have a fit-like character. This highlights that to understand strategy as a constellation of organizational elements, it is not sufficient to focus on the relationships between the elements, one must also to be mindful of the qualitative nature of the elements themselves and changes in them. Many of these changes are better characterized as "emergent" rather than as "designed." My findings contribute to the research on the processes that allows companies to evolve toward fit. Siggelkow recognized four processes that a company uses: thickening, patching, coasting, and trimming. I identified a fifth one-shaping-which refers to the process of transforming a core element while maintaining its identity and relationships with other elements. My conclusion is that shaping strategic core elements is an essential way through which companies maintain fit between their core elements and yet transform and grow radically during the periods of volatility and turbulence in the surrounding environment. Therefore, my findings are essential for the research on the processes that allow companies to evolve toward fit.Keywords Strategic fit, strategic change, activity systems, organizational elements, banking Organisaation toiminnot mallinsin hyödyntäen kvalitatiivista systeemikarttaa, jonka avulla pääsin havainnoimaan toimintojen pitkän aikavälin kehittymistä ja niiden välisen yhteensopivuuden sä...

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Business Models in European Banking: A Pre-and Post-Crisis Screening

Cited by 70 publications

References 63 publications

Bank Business Models at Zero Interest Rates

Bank Business Models at Zero Interest Rates

Banks and Fintechs: How to Develop a Digital Open Banking Approach for the Bank’s Future

Shaping Elements while Maintaining Fit

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