Risk and return of online channel adoption in the banking industry

He, Dongwei; Ho, Chun‐Yu; Xu, Li

doi:10.1016/j.pacfin.2020.101268

Cited by 12 publications

(17 citation statements)

References 40 publications

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“…Studies mostly observed the favorable impact of Internet banking on different measures of bank performance. For instance, a positive impact was observed in the context of the US (Brush et al, 2012;DeYoung et al, 2007;Momparler et al, 2012), Spain (Hernando and Nieto, 2007), Italy (Ciciretti et al, 2009), Turkey (Onay and Ozsoz, 2012), Ghana (Ahiadorme, 2018), Kenya (Chipeta and Muthinja, 2018), Jordan (Al-Dmour et al, 2019), China (Dong et al, 2020;He et al, 2020), Iran (Nazaritehrani and Mashali, 2020) and Oman (Al-busaidi and Al-Muharrami, 2021). On the contrary, adverse impacts are also documented in some prior studies in the context of the US (DeYoung, 2005), Europe (Delgado et al, 2007), Italy (Ciciretti et al, 2009), Turkey (Onay and Ozsoz, 2012), Jordan (Al-Smadi, 2011), and China (Chen et al, 2019;Dong et al, 2020;He et al, 2020).…”

Section: Internet Banking Intensity 1607mentioning

confidence: 89%

“…Internet banking can affect banks' profitability in two ways-(1) by increasing the revenue or income, and/or (2) by decreasing the costs (Brush et al, 2012). Income can be further sub-divided into two categories namely interest income and non-interest income (He et al, 2020). Internet banking offers several advantages to banks like customers easier access to bank's information and different types of services, faster launching and marketing of banking services, higher customer satisfaction and better customer relationship, and competitive advantage in attracting and retaining customers (Nazaritehrani and Mashali, 2020).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Internet banking offers several advantages to banks like customers easier access to bank's information and different types of services, faster launching and marketing of banking services, higher customer satisfaction and better customer relationship, and competitive advantage in attracting and retaining customers (Nazaritehrani and Mashali, 2020). Intuitively, one can expect these benefits to favorably affect banks' deposit raising and lending activities (He et al, 2020;Momparler et al, 2012Momparler et al, , 2013. Besides, Internet banking also allows banks to hold customers' deposits for a relatively long period as customers enjoy the luxury to defer their payments till the due dates (Brush et al, 2012).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

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Internet banking intensity and bank profitability: evidence from emerging Indian economy

Ghose

Maji²

2022

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PurposeThe purpose of this study is to investigate the impact of Internet banking intensity on banks' profitability performance. It also examines the deferential impact of Internet banking intensity on the profitability performance of public and private sector banks.Design/methodology/approachThe study uses data of 67 commercial banks operating in India over 9 years from 2011–2012 to 2019–2020. The volume and value of Internet banking are used as two proxies for Internet banking intensity. Return on assets and return on equity are considered measures of banks' profitability performances. The system GMM model and the three-stage least square (3SLS) model are used to investigate the impact of Internet banking intensity on performance.FindingsThe results indicate that the volume and value of Internet banking increase the overall profitability of the banks. The results further reveal that the positive impact of Internet banking on performance is higher in the case of public sector banks which possibly indicates that there are economies of scale of operation.Practical implicationsThe results suggest that banks and policymakers should strive to increase internet banking scope to improve performance. Private banks should focus on increasing their customer base to achieve economies of scale and public banks should work on the efficient utilization of resources.Originality/valuePrior studies investigated the impact of Internet banking adoption on the performance of banks. This study attempted to examine the impact of Internet banking intensity on the profitability performance of banks in the context of an emerging economy.

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Section: Internet Banking Intensity 1607mentioning

confidence: 89%

Section: Theoretical Frameworkmentioning

confidence: 99%

Section: Theoretical Frameworkmentioning

confidence: 99%

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Internet banking intensity and bank profitability: evidence from emerging Indian economy

Ghose

Maji²

2022

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“…Bank liquidity management requires an analysis of the level of liquid assets needed for repayment of liabilities over time to provide access to various funding sources for preparing the need for funding and control over compliance with liquidity ratios (He et al 2020).…”

Section: Specifics Of Banking Risk Typesmentioning

confidence: 99%

Banking Risks in the Asset and Liability Management System

Lysiak

Масюк

Chynchyk

et al. 2022

JRFM

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Banking risk management is considered weak compared to rapid changes in financial markets. In light of the recent global financial crisis, banking risk management has become a significant concern of banking regulators and government agencies. This work aims to build a model for assessing banking risks. The primary study method is economic–mathematical modeling based on the standardized model of the Basel Committee for Operational Risk Management, the modified CAPM model, and the model developed by Shapiro and Cornell for currency risk management. The information base was the financial statements of Bank Credit Agricole (Poland). As a result, an economic–mathematical model is built, which is the optimal combination of operational, currency, and credit risk management models. This model calculates the optimal values of bank balance sheet items, which allows for making the right management decisions. It allowed adjusting the value of the bank profit by 3.6 million US dollars. In conclusion, considering the results of banking risk modeling, the need to build a strategy for the bank’s development is determined.

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“…(3) Operational Risk Adopting FinTech solutions, such as blockchain, can improve banks' efficiency; however, it may also affect the banks' business by increasing their operational risks [63]. For the banking sector, operational risk mainly refers to the potential for loss due to failure or dysfunction in system reliability and integrity; the associated risks include scalability, security, reversibility, and interoperability [64].…”

Section: Management and Financementioning

confidence: 99%

Hybrid Decision Model for Evaluating Blockchain Business Strategy: A Bank’s Perspective

2021

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Banks attempt to invest in emerging financial technology (FinTech), such as blockchain, to enhance competitiveness. There is a great deal of literature on the technical and legal aspects of blockchain. However, there is little specific guidance on how banks can apply a holistic model to evaluate the blockchain-based business. This study proposes a hybrid decision model with confidence-weighted fuzzy assessments to address this valuable research topic. Supported by a group of seasoned experts, five major blockchain-based business models are evaluated for a domestic bank in Taiwan. The key findings contribute to understanding the importance of the involved factors and identifying the ideal business strategy for the bank. The result suggests that the most crucial dimension is policies and regulations, not the technical capability of banks.

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Risk and return of online channel adoption in the banking industry

Cited by 12 publications

References 40 publications

Internet banking intensity and bank profitability: evidence from emerging Indian economy

Internet banking intensity and bank profitability: evidence from emerging Indian economy

Banking Risks in the Asset and Liability Management System

Hybrid Decision Model for Evaluating Blockchain Business Strategy: A Bank’s Perspective

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