Effect of investments in information technology on bank performance: empirical evidence from Indian public sector banks

Arora, Hitesh; Arora, Padmasai

doi:10.1504/ijbis.2013.055298

Cited by 19 publications

(13 citation statements)

References 25 publications

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“…They argue that DEA is a significant tool in banking sector analysis. Finally, Arora and Arora (2013) examine the effect of IT investments of bank performance in India using a 2-stage GLS and GMM techniques. They find that investments in IT show positive impacts on both the operating profits per employee.…”

Section: Determinants Of Bank Efficiencymentioning

confidence: 99%

Number of ATMs, IT investments, bank profitability and efficiency in Greece

Giordani

Floros

2015

GBER

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This paper investigates the effect of Automated Teller Machines (ATMs), Information Technology (IT) investments and other determinants on the efficiency and profitability of Greek commercial banks. Following the two-step procedure, (i) efficiency is derived via the non-parametric Data Envelopment Analysis (DEA) technique under the Variable Returns to Scale (VRS) assumption, and (ii) efficiency scores are linked to a series of determinants of bank efficiency using a Tobit regression model. We find that profitability (ROAA and ROAE), ATMs and capitalisation show a negative impact on the efficiency of Greek banks. We also report that banks' size, capitalisation, IT investments and ATMs do not have any effect on the ROAA or the ROAE but they have a positive effect on the fees and commissions. However, we find that ATMs have a negative effect on the net interest income.

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Section: Determinants Of Bank Efficiencymentioning

confidence: 99%

Number of ATMs, IT investments, bank profitability and efficiency in Greece

Giordani

Floros

2015

GBER

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“…Advancements in payments technology also have a positive effect on profitability of banks through a reduction in labour and transaction costs [ 30 , 32 , 39 ]. Arora and Arora [ 4 ] find evidence of information technology (IT) investments positively impacting operating profits per employee. Research also underscores the importance of innovative payment channels like internet banking, point of sale (PoS) machines, and telephone banking in improving bank’s market share [ 41 ].…”

Section: Review Of Literaturementioning

confidence: 99%

Impact of digital payment adoption on Indian banking sector efficiency

Saroy

Jain

Awasthy

et al. 2023

J BANK FINANC TECHNOL

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Combining Data Envelopment Analysis and dynamic panel data methods, we find that adoption of digital payment technologies by Indian banks has helped enhance their cost efficiency. Instead of directly reducing the inputs used in intermediation, the gain in efficiency may be on account of cheaper availability of such inputs when banks go digital. These gains may stem from assimilation into the entire digital payments ecosystem, as opposed to piecemeal adoption of technology. We find both cost and technical efficiencies exhibiting persistence. Banks’ relative asset holdings in the industry, non-performing assets, cost of deposits and returns on advances and equity are other important variables that drive cost efficiency.

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“…The existing studies highlighting on bank's profitability is presented by the proxy of two common factors such as Return on Equity (ROE) and Return on Assets (ROA). Some studies measure the bank's profitability with these two indicators and consider as endogenous variables (Anwar & Herwany, 2006;Arora & Arora, 2013;T. Beck, Demirgüç-Kunt, & Levine, 1999;Kosmidou, 2008;Naceur & Goaied, 2008;E.…”

Section: Banks' Profitabilitymentioning

confidence: 99%

Asymmetric Impact of Oil Prices and Stock Prices on Bank’s Profitability: Evidence from Saudi Islamic Banks

Amin

2022

IJIEF

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The soundness of financial institutions including banks depends on both internal factors and external factors. The profitability of the banks largely affected by external shocks like oil prices and stock prices. As an oil-exporting country, Saudi economy particularly its banking sector largely rely on the oil prices. This study examines the asymmetric impact of oil prices and stock prices on Saudi Islamic banks’ profitability for the period 2000-2020. Two Saudi Islamic banks’ profitability is examined by the factors like Return on Equity (ROE) and Return on Assets (ROA) with the help of a nonlinear autoregressive distributed lag (NARDL) model. The estimated results are observed to be unbiased and robust. The results of this study show that OILP and STOCKP have significant role in determining the Islamic banks’ profitability in Saudi Arabia. Both higher oil prices and stock prices have positive influence on ROE and ROA of Saudi Islamic banks. This study suggest that development and efficiency of Saudi stock market is important and macroeconomic policy should support the country’s economic diversification. The management of Islamic banks need to focus on effective risk assessment and market monitoring tools to face the fluctuation of oil prices and their stock prices as these factors affect their profitability. Besides, Saudi Islamic banks need to diversify their investment portfolios into more productive and export oriented private sectors such as Small Medium Enterprises (SMEs). This strategic policy will enable Islamic banks to absorb any future shock of oil prices without affecting their profitability.

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Effect of investments in information technology on bank performance: empirical evidence from Indian public sector banks

Cited by 19 publications

References 25 publications

Number of ATMs, IT investments, bank profitability and efficiency in Greece

Number of ATMs, IT investments, bank profitability and efficiency in Greece

Impact of digital payment adoption on Indian banking sector efficiency

Asymmetric Impact of Oil Prices and Stock Prices on Bank’s Profitability: Evidence from Saudi Islamic Banks

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