International Journal of Financial Innovation in Banking (10 papers in press)
Analyzing UTAUT with trust toward mobile banking adoption in China and Pakistan: Extending with the effect of power distance and uncertainty avoidance
by Sadia Akhtar, Muhammad Irfan, Shamsa Kanwal, Abdul Hameed Pitafi
Abstract: Banking technology supports financial systems through emerging a solid connection between local population and financial intuitions. Technology acceptance studies with innovative models are considering the key research in Asian countries specifically China and Pakistan. The current study used unified theory of acceptance and use of technology (UTAUT) model with trust factor by moderating two cultural dimensions namely power distance and uncertainty avoidance. In addition, novel ideas were incorporated in determinants to investigate the national cultural effects on individuals behavioral intentions toward mobile banking adoption in China and Pakistan. Empirical study was performed to test the proposed cross-cultural model using the data obtained from both countries. The model was analyzed through multiple and moderated regression analyses using IBM SPSS software. Results proved that performance expectancy, effort expectancy, social influence and trust were important predictors of behavioral intentions to adopt m-banking in Pakistan. On the other hand, performance expectancy and trust have significant effect on individuals behavioral intentions to adopt m-banking in China. Moreover, power distance and uncertainty avoidance were significant moderators in analyzing the behavioral intention to use m-banking.
Keywords: cross-culture; mobile banking; power distance; trust; unified theory of acceptance and use of technology; uncertainty avoidance.
DISRUPTIVE INNOVATIONS AND THE CHALLENGES FOR BANKING
by Anders Kjellman, Tom Björkroth, Taisto Kangas, Risto Tainio, Thomas Westerholm
Abstract: In this article we analyse the concepts of disruptive innovations, innovation platforms and potential ways forward for the banking industry in Europe. The choice of platform and place in the eco-system are strategic choices under a high degree of uncertainty. There is no quick fix, nor one size fits all banks, however we find that banks need capable teams, that are able to come up with viable solutions for the future, and the banks platform.
Keywords: Disruptive innovation; bank platforms; fintech; bank management.
Islamic Finance: Multicreteria Analysis and Application
by Nesrine JMILI
Abstract: Several studies and researches are interested in Islamic finance; these studies seek to understand the concept, to identify the principles, the operations and to join the experiments. The purpose of this paper is to determine a comparative study between Islamic banks and conventional banks in terms of performance. This article deals with multicriteria analysis in order to offer a model that makes it possible to clearly explain the ranking randomness of banks, how to take into account actors' behaviors from inter-criteria and intra-criteria information. In addition, we make a strong impression on a robustness review of our empirical analysis.
Keywords: Islamic finance; multicriteria decision support; multicriteria ranking approach; sensitivity and robustness.
The role of financial exclusion in weakening the performance of banks: dynamic panel data analysis in Algeria and Tunisia
by Hasnia Douma, Nesrine Bettioui, Ali Bendob
Abstract: In the East and North Africa region, nearly 70 percent of adults (168 million) do not report any ownership of the account in the Arab world, which is lagging behind other regions. The importance of financial inclusion lies in its impact on the economy of countries, economic growth, financial sector development, improving financial sector stability. This study aims to diagnose the relationship between financial inclusion and performance of banks in Algeria and Tunisia during 2004-2012 by using the panel data and the GMM method. Our results under static or dynamic panel data analysis show the negative impact of financial inclusion on profitability indicators (ROA, ROE, and NIM). We conclude that financial inclusion decreases the profitability of banks. This result reinforces the role of lack of financial inclusion or financial exclusion in the non-development of the banking sector and the non-promotion of economic growth in Algeria and Tunisia during the study period.
Keywords: financial inclusion; exclusion; the performance of banks; CAMEL; Algeria; Tunisia; GMM.
A Century of Strategic Management and Corporate Sustainability: How May Bank-Owned Projects Avoid Bankruptcies
by Aly Mansour, Subhra Chakrabarty
Abstract: This study analyzed sustainable corporate projects as a means of lifting consequences of financial and economic crises on affected societies, with applications pertaining to rural societies that have suffered the most in certain areas. Unemployment, for example, contributed to the rise in crime rate, divorce, drug problems, and other social problems within several societies. The study hypothesized that bank-owned projects pool may continue on its growth despite financial and economic upheavals. The methodology followed was a case study analysis of existing bank-owned projects pool of Banque- Misr with over 60 sustainable projects for almost a century. The findings have presented classic bank-owned projects pool with a higher growth rate. In conclusion, the study recommended bank-owned projects pool as an alternative to face default on loan payments, corruption, bankruptcies, unemployment, poor healthcare services, and low standards of education due to the financial and economic global upheavals in recent years.
Keywords: Bank-Owned Projects; Banque Misr; Corporate Social Responsibility; Strategic Management.
Impact of religious experiences on Islamic Stock Market Return
by Marwa Jawada, Siwar Ellouz
Abstract: This paper aims to examine the Islamic stock market behavior in different periods of the Islamic calendar. It focuses on how the mechanisms underlying a religious occasion can influence the stock market return. This research uses daily price index data for a wide range of Islamic stock index market around the world with an event study methodology, to detect the existence of Islamic calendar anomalies. For a total of 724 events examined, the results confirm that religiosity influences investor behavior, by reporting stock return anomalies on the pre and post-holidays periods. The rationalizations proposed for the existence of these anomalies were essentially of a behavioral nature. The collective experience of Islamic occasions can affect the mood of its observers, strengthen their sense of belonging and promote solidarity in the Muslim world, leading to optimistic beliefs that extend to investment decisions. Sentiment related to religious event is generally used to explain the results found in the research.
Keywords: Religion; Islamic occasions; Calendar anomalies; abnormal return; pre-event; post-event; investor sentiment and mood.
Blockchain technology: Challenges and opportunities for banks
by Pierluigi Martino
Abstract: This paper explores blockchain technologys potential implications for banks. This study is based on qualitative-based interviews with three professional bankers in different European banks that are dealing with the challenges of blockchain. The results indicate that blockchain technology is both a threat to and an opportunity for banks, providing support to the argument that blockchain is a disruptive technology that will create new opportunities for banks and new risks to their business. Nonetheless, the current lack of regulation and some technical limitations of the technology mean that blockchain is an opportunity for rather than a risk to banks. Blockchain technology may vastly improve banking processes efficiency and therefore the products and services banks offer customers, particularly in areas such as lending, payments and capital markets.
Keywords: blockchain; distributed ledger technology; financial innovation; cryptocurrencies; banking; process efficiencies; lending; payments; capital markets; financial regulation.
Exploring the antecedents of intention towards adoption of internet banking: A study in rural setting
by SHAGUN TYAGI
Abstract: Through this research, an attempt has been made to analyse the impact of factors influencing consumer intentions to adopt e-banking services in rural areas. For this purpose, a cross-sectional study was conducted. The study was conducted on 409 consumers selected through simple random sampling from the rural areas of North Indian state. A self-administered questionnaire was developed for collecting data. Trust, internet banking awareness, perceived ease of use, financial literacy and perceived risk were used as predictors of consumer
intentions to adopt internet banking. Reliability and validity of the instrument were tested using Cronbachs alpha and KMO. A structural model was generated by applying SEM through AMOS. The results of the study show that trust is a strong predictor of the consumer intentions to adopt e-banking in a rural context and consumer information privacy is not just necessary but mandatory for building a level of trust. Perceived risk shows contrasting results to the past studies conducted but the relationship of perceived risk with trust is significant. The
researchers also conclude that perceived risk needs to be extended in future studies so that its relationship with the use of perceived ease can be explained in a better way and explaining the effect of financial literacy on consumer intention to adopt online service.
Keywords: e-banking; consumer intention; perceived ease of use; perceived risk; trust; awareness; financial literacy and rural area.
Liquidity impact on assets pricing in the context of Fama and French model
by Ghlama Haddad, Slaheddine Hallara
Abstract: The three-factor asset pricing model of Fama and French (1993) was developed as a response to the CAPM limits in explaining the financial assets return. However, these two models do not take into account that the liquidity factor has consistently proven to have a crucial importance. Therefore, in this research, we study the impact of liquidity on financial assets pricing in presence of Fama and French factors (SMB and HML). We use data of two portfolios of assets listed on the Sao Paulo and Shanghai stock exchanges, over a period of ten years, spreading between January 2003 and December 2012. We have shown that liquidity has a significant and negative impact on the expected returns of financial assets listed on these two markets.
Keywords: Liquidity; Fama and French model; asset pricing; emerging markets.
CUSTOMERS READINESS FOR A PARADIGM SHIFT TOWARDS CYBERSPACE: AN EXPLORATORY INVESTIGATION IN INDIAN RETAIL BANKING
by BRAJESH MISHRA, ANUPAMA PRASHAR
Abstract: The present study is an exploratory investigation in the Indian retail banking sector with the purpose of understanding the drivers of adoption of Information and Communication Technology (ICT) in the retail banking services. The study attempts to achieve the research objective by presenting a triadic view-point of customers, industry, and policymakers. The study is an academic attempt to understand the views of customers, regulators, and banking industry about the traditional brick & mortar, and ATM models, identify various factors that may impact use of ICT to access retail banking services. While the trends in the usage of digital payments including ICT based delivery channels for accessing retail banking services have been examined to gain demand side perspective, the examination of trends in growth of bank branches and ATMs network have been carried out to verify whether the banks are still focussing on building the brick & mortar, and ATM models of retail banking. It is found that there is a gap between the available infrastructure to support the electronic retail banking platform and the one expected by the retail banking customers for a paradigm shift towards cyberspace.
Keywords: Retail Banking; e-banking; ICT based delivery channels; customer readiness.