Research background: The COVID-19 pandemic has significantly impacted the global banking sector, leading to shifts in operational dynamics and customer interactions. This study explores the ...pandemic's dual impact, emphasizing the rapid transition from traditional to digital and mobile banking, and the resultant decline in physical branch banking. Purpose of the article: The main of this paper is to examine the changes in customer behaviour and bank operations, with a focus on the integration of digital and physical channels through omnichannel strategies. The research also addresses the increased credit risks, operational challenges, and regulatory hurdles banks now face, alongside the potential for digital innovation and enhanced customer engagement. Methods: At the core of this analysis is the pandemic's effect on banking distribution channels, with a marked acceleration towards digital and mobile banking, fundamentally altering the banking service landscape. The study investigates how these shifts have influenced customer behaviour and bank operations, noting the decline in traditional branch banking and the emergence of omnichannel strategies that blend digital and physical banking channels. Additionally, the paper assesses the wider implications of these changes for the banking sector, including increased credit risks, operational disruptions, and regulatory challenges, against the backdrop of opportunities for digital transformation and innovation. Findings & Value added: By synthesizing insights from academic and industry sources, the study aims to provide a comprehensive view of the banking sector's adaptation in the post-pandemic era. This includes a nuanced understanding of the evolving banking landscape and its implications for the future, offering valuable insights for banking professionals, policymakers, and academics Keywords: COVID-19 pandemic; banking sector; digital banking; omnichannel strategies; customer behaviour JEL Classification: D53; G21
The unfortunate price paid by the rapid growth of the global economy is the destruction of the ecological environment, yet financial development represented by the establishment of regional financial ...institutions may have a positive effect on environmental improvement. Based on data of 284 prefecture-level and above cities in China from 1998 to 2018, this research takes the establishment of China's city commercial banks (CCBs) as a quasi-natural experiment and constructs a difference-in-differences (DID) model to explore the impact of these regional banks on regional environmental pollution in China. The results are as follows. First, the establishment of CCBs significantly reduces regional pollution, and the pollution reduction effect of CCBs that have been established for several years and opened branches is more obvious. Second, the establishment of CCBs cuts environmental pollution by improving the innovation capacity, attracting more foreign direct investment (FDI), and upgrading the industrial structure. Third, the higher the economic strength, population size, and degree of marketization a city exhibits, the stronger is the pollution reduction effect of CCBs. Further analysis finds that the effect of CCBs in reducing pollution is higher in cities with strong economic power and large populations, which mainly relates to the innovation promoting effect. When cities have a high degree of marketization, the pollution reduction effect of CCBs generally comes from the innovation promoting effect and the FDI attracting effect. Therefore, cities should continue to improve the operating efficiency of regional banks, properly handle the relationship between regional banks and local governments, optimize the allocation of financial resources, and improve environmental quality through green finance.
•Take the establishment of China's City Commercial Banks (CCBs) as a quasi-natural experiment.•Construct a DID model to explore the impact of these regional banks on regional environmental pollution in China.•The establishment of CCBs significantly reduces regional pollution.•The establishment of CCBs cuts pollution by innovation improving, FDI attracting, and industrial structure upgrading.•The pollution reduction effect of CCBs is affected by the economic strength, population size, and marketization of a city.
To investigate the bidirectional relation between bank digital transformation and liquidity mismatch, this paper employ the empirical methodology of panel Granger causality tests to examine the ...relationship between digital transformation indicators and liquidity mismatch index, employing panel vector autoregression models, as well as a panel structural vector autoregression model, employing the data of 181 Chinese commercial banks in the period before COVID-19. We find a bidirectional causality between digital transformation and the liquidity mismatch index. An increase in the degree of digital transformation in commercial banks significantly reduces the bank liquidity mismatch index; furthermore, a decrease in the degree of the bank liquidity mismatch index results in an increase in bank digital transformation. The digital transformation enhances a bank's susceptibility to liquidity stress, although a bank suffering from higher liquidity mismatch prefers to promote digital transformation. Furthermore, we find that cognitive digital transformation is the primary driving factor of the bidirectional causality relationship and the relationship between digital transformation and the liquidity mismatch index is heterogeneous for banks with various ownership types.
•Examine the relationship between bank digital transformation and the liquidity mismatch index.•The digital transformation enhances a bank's susceptibility to liquidity stress.•A bank suffering from higher liquidity risk prefers to promote digital transformation.•Cognitive digital transformation is the primary driving factor of the bidirectional causality.•Bidirectional causality relationship is heterogeneous for banks with various ownership types.
The liquidity risk of commercial banks has become an important driver of the major risks in the modern economic system. This paper synthesizes the off balance sheet items which are often ignored in ...traditional bank liquidity researches, and uses the method of tracking and comparative analysis in different window periods to explore the liquidity changes and possible risks of Chinese commercial banks before, during and after the financial crisis. It is found that traditional loan projects, committed loan projects and demand deposits are important drivers of liquidity risk; Although the liquidity level of China’s banks is high, due to the high demand deposit rate, low core capital ratio, rapid loan growth and high non-performing rate, and the lack of risk prevention awareness, liquidity risk is still a major risk that China’s commercial banks need to face.
The driving force of any country with market economy is the banking sector, which, as banking crises have shown, is not perfect and therefore needs more detailed study. This article from the series ...«Analysis of main indicators of the Anglo-Saxon banking system» is devoted to the study of the dynamics of main indicators of the American banking system for the period from 2000 to 2019 inclusive. Over the last decade, the number of commercial banks has decreased, including the United States (USA) ones. Based on data from the Federal Deposit Insurance Corporation (FDIC) with the separation of main studied indicators of the banking system and their detailed analysis, it was found that the financial crisis of 2008—2009 negatively affected the assets and liabilities of commercial banks, the dynamics of their net profit and increased the amount of outstanding loans. It is substantiated that despite the increase in private sector loans in the US, the latter do not show a high debt burden. It was also found that evidence of the consolidation process is an increase in specific gravity of the Top 5 largest banks in the country in total US banking assets. In this research, an attempt to study the effect of crisis in 2008-2009 indicators characterizing assets and liabilities of commercial banks in the United States has been made. Thus, to do this hypothesis to testify relationship of crisis in 2008—2009 and indicators characterizing assets and liabilities of commercial banks in the United States have to be tested. On the basis of the investigation, the conclusion was drawn that the dynamics of the main indicators of the American banking system for the period under study shows a positive trend, except for the financial crisis of 2008—2009. The number of banks is constantly decreasing, which is explained not so much by their liquidation as by their mergers and acquisitions. During the financial crisis of 2008, banks operated only with a profit of 10.2 billion dollars, which is 59.8% less than the previous year 2007. This is the lowest annual income since 1989. However, the significant increase in revenues in 2018 can be explained by the changes in taxation. At the same time, the share of outstanding loans has been declining every year since 2009, which is the evidence of prudent credit policy.
Keywords: Federal Reserve System, commercial banks, savings institutions, mergers and acquisitions of commercial banks, assets of commercial banks, liabilities of commercial banks.
JEL Classіfіcatіon G21, G34
Formulas: 1; fig.: 6; tabl.: 3; bibl.: 35.
In this study, we investigate how CEO narcissism, in combination with corporate governance practices, impacts organizational risk-taking and how this in turn affects organizations’ resilience to ...environmental conditions. We examine these issues in the context of the recent collapse (systemic shock) of the U.S. banking industry in September 2008, using a sample of 92 CEOs from 2006 until 2014. We find that before the shock CEO narcissism positively affected the riskiness of banks’ policies, especially when compensation policies that encourage risk-taking (stock options) are in place. The positive effect of narcissism was dampened, however, when board monitoring was more effective (because of the presence of knowledgeable outsider directors). Furthermore, we find that these preshock features hamper organizations’ resilience to (economic) shocks, as banks led by more narcissistic CEOs before the September 2008 collapse experienced a slower recovery to preshock performance levels afterwards. This effect was partially mediated by banks’ preshock riskiness of policies. We attribute these effects to the associated depletion of the organizations’ internal resources (beyond slack). Post-hoc analyses further underscore this idea, showing that the U.S. government’s capital injections through the Troubled Assets Relief Program (TARP)—resolving the “problem” of resource depletion—moderated these effects.
This study investigates the impact of bank-level Financial Technology (Fintech) innovations on banks’ performance in the Kingdom of Bahrain from 2012-2021. Annual data of banks listed in Bahrain’s ...Bourse has been utilized to achieve this objective. In addition, bank-level FinTech indices have been constructed by a textual analysis method that assesses input dimensions through 32 keywords under four categories, including artificial intelligence, blockchain, cloud computing, and big data; FinTech output dimension is evaluated through payment and settlement, resource allocation, risk management, and channel construction technology. Using different panel data estimators, such as pooled OLS, fixed effects, random effects, and panel-corrected standard errors linear regression, results show that FinTech innovations increase banks’ performance. In addition, the findings demonstrate that banks' capital adequacy ratio, earnings ability, total assets, and annual GDP growth rate also significantly positively impact bank performance. Years in business have a significant adverse effect on bank performance. Interestingly, conventional and state-owned banks have a higher positive impact on returns on assets (ROA) than Islamic and privately owned banks. Policymakers and investors should pay close attention to facilitating ongoing FinTech innovations in the Kingdom of Bahrain to create opportunities and build a more inclusive and efficient financial sector.
Data envelopment analysis (DEA) has witnessed increasing popularity in banking studies since 1985. In this paper, we propose a new DEA-based analysis framework with a regression-based feedback ...mechanism, where regression analysis provides DEA with feedback that informs about the relevance of the inputs and the outputs chosen by the analyst. Unlike previous studies, the DEA models used within the proposed framework could use both inputs and outputs, only inputs, or only outputs. So far, the UK banking sector remains relatively under researched despite its crucial importance to the UK economy. We use the proposed framework to address several research questions related to both the efficiency of the UK commercial banking sector and DEA analyses with and without regression-based feedback. Empirical results suggest that, on average, the commercial banks operating in the UK—whether domestic or foreign—are yet to achieve acceptable levels of overall technical efficiency, pure technical efficiency, and scale efficiency. On the other hand, DEA analyses with and without a linear regression-based feedback mechanism seem to provide consistent findings; however, in general DEA analyses without feedback tend to over- or under-estimate efficiency scores depending on the orientation of the analyses. Furthermore, in general, a linear regression-based feedback mechanism proves effective at improving discrimination in DEA analyses unless the initial choice of inputs and outputs is well informed.
PurposeThe purpose of this paper is to evaluate Chinese commercial banks efficiency based on different non-performing loans in the process. Moreover, we identified the difference among different ...types of banks (state-owned commercial banks, joint-stock commercial banks and city commercial banks) and different operation stages (deposit producing sub-stage, profit earning sub-stage and overall stage).Design/methodology/approachAssurance region (AR) restrictions are combined with a two-stage data envelopment analysis (DEA) model. The efficiency scores of 26 Chinese commercial banks (listed banks) are analyzed by a two-stage AR-DEA model in the study period of 2013–2017.FindingsThe results show that state-owned commercial banks had better performance than joint-stock commercial banks and city commercial banks over the five-year study period. The development of Internet finance has positive impact on deposit producing sub-stage and insignificant non-homogeneity existed among the different groups in the circumstances of considering different non-performing loans.Practical implicationsThe research findings provide practical insights that help bank managers find the defects in operation process, which need to be improved.Originality/valuePrevious studies viewed non-performing loans as an integrated whole variable. The paper divides non-performing loans into three categories based on the risk and investigates the effect of different types of loans on bank efficiency scores.
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