International Journal of Financial Innovation in Banking
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International Journal of Financial Innovation in Banking (6 papers in press)
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.
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. DOI: 10.1504/IJFIB.2019.10021814
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.