African corporates face rising cybercrime risks

2021 ◽  
Keyword(s):  
Financial Institutions ◽  
Technical Education ◽  
Online Banking ◽  
Public Confidence ◽  
It Infrastructure ◽  
Online Services ◽  
Content Type ◽  
Talent Pool ◽  
The Cost ◽  
Threat Levels

Significance The cost, frequency and sophistication of cyberattacks is increasing worldwide, widening the gap between cyber preparedness and threat levels. Yet the continued lack of investment by African corporates in cybersecurity and a limited number of qualified technicians mean that key institutions are failing to strengthen their security in line with rising risk. Impacts Costly cyberattacks threaten the sustainability of weaker financial institutions, especially poorly performing, under-capitalised banks. Phishing, hacking and ransomware attacks erode public confidence in online services, constraining the expansion of online banking. Poor IT infrastructure and technical education will impede the creation of a local cybersecurity talent pool.

The effects of IFRS adoption and firm size on audit fees in financial institutions in Ghana

2019 ◽  
Vol 32 (3) ◽  
pp. 436-453
Author(s):  
William Coffie ◽  
Ibrahim Bedi
Keyword(s):  
Financial Institutions ◽  
Firm Size ◽  
Financial Services ◽  
Audit Fees ◽  
Financial Services Industry ◽  
Content Type ◽  
Listed Firms ◽  
Ifrs Adoption ◽  
Services Industry ◽  
The Cost

Purpose This study aims to investigate the effects of international financial reporting standards (IFRS) adoption and firm size on auditors’ fees determination in the Ghanaian financial industry. Design/methodology/approach The authors use the annual report of 52 listed and non-listed firms spanning from 2003 to 2014. Guided by the hypotheses, the authors conditioned audit fees on IFRS adoption and firm size and execute robust fixed effects panel regression. Findings The results show that IFRS adoption has a positive coefficient with audit fees suggesting that the adoption of IFRS, indeed, increases the audit fees paid by banks and insurance firms, as well as the industry as a whole. The results are consistent with the idea that IFRS adoption increases auditor efforts with respect to time and complex nature of some aspect of the standards. Again, as expected, the coefficient of size is positively and significantly related to audit fees. This indicates that the size of the auditee plays a vital role in determining audit fees. Research limitations/implications The study is limited by industry (i.e. the financial services industry) and geography (i.e. Ghana). The authors propose further research that will widely consider other sectors and countries to improve the current scanty literature in this area. Besides, theoretically, the study is limited to the lending credibility theory and feels compelled to reiterate the importance of considering alternative theoretical perspective(s) in future research. Practical implications This study is significant to practitioners as it demonstrates the importance of the determinants of the auditors’ fees. It helps auditors to apply the relevant charging formula when determining audit fees, while it helps managers to improve upon the quality of reporting to control audit bill and forecasting their audit expenditure. Originality/value The results of the study extend the literature on the cost side of IFRS adoption by investigating the financial services industry and non-listed firms in a new context, i.e. a developing country where this research is uncharted. The existing studies based their analysis on either cross-section or pooled analysis and shorter post-adoption period (Cameran and Perotti, 2014). However, using an extended post-adoption period data, the authors base the study on analytical panel model, which directly examine the cost side of IFRS adoption with size as joint key explanatory variables with emphasis on financial institutions and external auditors.

Toward Islamic deposit insurance model

2020 ◽  
Vol 11 (1) ◽  
pp. 130-151 ◽  
Author(s):  
Usama Adnan Fendi
Keyword(s):  
Financial Institutions ◽  
Deposit Insurance ◽  
Banking System ◽  
Theory And Practice ◽  
Content Type ◽  
Proposed Model ◽  
Islamic Financial Institutions ◽  
Rules And Principles ◽  
Insurance Model ◽  
The Cost

Purpose This paper aims to provide an essential framework for establishing Shariah-compliant deposit insurance scheme, by reviewing the Shariah provisions concerning the available approaches for deposit guarantee, types of deposits in Islamic financial institutions and the permissible party to incur the cost of this guarantee. Design/methodology/approach This paper reviews the Fiqh rules and principles approved by the well-known Islamic Fiqh references, as well as the resolutions of International Islamic Fiqh Academy (IIFA) and Shariah standards issued by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), and presents these resolutions and judgments in a modern applicable way. Findings This paper recommends that the Islamic scheme for deposit insurance should be established based on Takaful insurance principle, and this scheme must adopt fund segregation principle to comply with Shariah provisions for guarantee permissibility. Research limitations/implications The paper bridges the gap between theory and practice by highlighting how the proposed model can be initiated in practice, thus, it can influence public policy in countries with Islamic banking system. Originality/value This paper represents a significant contribution toward the establishment of a consensual Shariah-compliant Islamic deposit insurance model.

CSR performance and the cost of debt: does audit quality matter?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sami Bacha ◽  
Aymen Ajina ◽  
Sourour Ben Saad
Keyword(s):  
Financial Institutions ◽  
Audit Quality ◽  
Cost Of Debt ◽  
Firm Risk ◽  
Socially Responsible ◽  
Two Stage ◽  
Content Type ◽  
Debt Pricing ◽  
Big 4 ◽  
The Cost

Purpose This study aims to shed light on the effect of corporate social responsibility (CSR) on the cost of debt. It also investigates whether audit quality affects the cost of debt incurred by socially responsible firms. Design/methodology/approach Based on a sample of French non-financial companies over the period 2005 to 2016, this paper uses panel data regressions. This paper re-estimates the model using Newey-West standard errors and the weighted-least-squares method. For further robustness, this paper runs instrumental variable regressions using the two-stage instrument variable method (two-stage least square). Findings The results show a negative relationship between CSR performance and the cost of debt, suggesting that financial institutions are likely to apply preferential costs for socially responsible firms. Financial institutions reward socially responsible companies as they recognize the potentiality of CSR to reduce firm risk and enhance its reputation. The findings also show that the perceived audit quality, along with CSR performance, are relevant to banks in the pricing of debt. The incremental audit quality, attributable to audits by the Big 4 auditors, decreases the cost of debt for CSR firms. Big 4 auditors are expected to, simultaneously, play information and insurance roles, thereby enhancing the firm risk profile. The results are robust to alternative audit quality measures (i.e. audit fees). Practical implications This study has important implications for managers and banks. Managers will be able to understand the effect of CSR on financing costs with relevant implications for strategic financing planning. Firms are also encouraged to signal their commitment to maintain a high-level quality reporting and reduce agency costs through their expenditure in auditing (i.e. hiring a large well-known audit firm). Moreover, this study sensitizes banking institutions to encourage the concept of socially responsible finance and consider soft information (i.e. involvement in societal issues, corporate citizen, trustworthiness, integrity and non-opportunistic behavior), as part of the credit decision-making and debt pricing process. Originality/value This study extends the literature on CSR and the cost of debt. Unlike prior studies, this paper focuses on the debt-pricing effects of audit quality for CSR firms. Audit quality is deemed to be an important governance feature that is likely to constraint opportunistic behaviors (i.e. CSR diversion) and play information and insurance roles to lenders. Audit quality (perceived or real), along with CSR performance, are associated with lower costs of debt.

Earnings quality and cost of debt: evidence from Portuguese private companies

2016 ◽  
Vol 14 (2) ◽  
pp. 178-197 ◽  
Author(s):  
Cecília Rendeiro Carmo ◽  
José António Cardoso Moreira ◽  
Maria Cristina Souto Miranda
Keyword(s):  
Financial Institutions ◽  
Earnings Quality ◽  
Listed Companies ◽  
Cost Of Debt ◽  
Company Size ◽  
Private Companies ◽  
Content Type ◽  
Debt Level ◽  
The Cost ◽  
The Relationship

Purpose The purpose of this paper is to test the relationship between earnings quality and the cost of debt for private companies in a “code-law” country (Ball et al., 2000). The analysis controls for company size, debt level and audited information. Design/methodology/approach The paper uses the ordinary least squares regression technique to test the relationship between earnings quality and the cost of debt. Findings The collected empirical evidence shows a negative relationship between earnings quality and the cost of debt and controls for company size and debt level. Such a relationship is stronger when the company information is audited. Research limitations/implications Similar to other studies, this paper has two main limitations. There was no access to specific data on the interest rates charged on bank loans, implying that the cost of debt is measured by the ratio of the interest expense to interest-bearing debt. The research only uses earnings quality measures based on abnormal accruals. Practical implications The collected evidence suggests that earnings quality have economic consequences for private companies by affecting their cost of debt, similar to those observed in previous studies for listed companies. This evidence can be seen as an incentive for private companies to increase their financial information quality. For debt providers, namely, financial institutions, the findings can be of interest to help them price properly the loans they make available to private companies. In general, the findings of this research can be of interest for company managers and financial institutions in countries with an institutional environment similar to that of Portugal. Originality/value The relation between earnings quality and the cost of debt has been so far studied for listed companies in “common law” countries. This paper provides new and complementary evidence about such relation for private companies and “code-law” country.

Cybersecurity risks will rise in Mexico

2018 ◽  
Keyword(s):  
Financial Institutions ◽  
Financial Sector ◽  
Online Banking ◽  
Third Party ◽  
Complete Understanding ◽  
Risk Models ◽  
Content Type ◽  
Business Impact ◽  
Insurance Firms ◽  
New Challenges

Subject Cybersecurity risks. Significance Hackers stole an estimated 300 million pesos (15 million dollars) from Mexican financial institutions in April and May 2018, exploiting vulnerabilities in third-party software. Cyberattacks are an emerging critical risk for the financial sector not just because of the business impact of any losses but also because of the increased media attention and reputational damage attacks bring. Impacts The rise of mobile and online banking and new third-party applications, raise new challenges for the financial sector. Insurance firms will see more demand for cybersecurity insurance but are yet to develop a complete understanding of relevant risk models. Total prevention of cyberattacks is unrealistic, making the ability of systems to respond and recover crucial.

Does usage level of online services matter to customers’ bank loyalty?

2014 ◽  
Vol 28 (4) ◽  
pp. 292-299 ◽  
Author(s):  
Shalom Levy
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Customer Loyalty ◽  
Positive Relationship ◽  
Online Banking ◽  
Human Interaction ◽  
Online Services ◽  
Banking Services ◽  
Content Type ◽  
Usage Level

Purpose – This paper aims to evaluate the relationship between the customer’s relative usage levels of online banking services and bank loyalty, and to examine the effect of customer satisfaction with the quality of online banking services and services’ convenience in this relationship. This study proposes a conceptual framework, integrating these factors. Design/methodology/approach – Data were collected from among traditional banks’ customers. The study uses a factor analysis method following path analysis, using AMOS 19 and structural equation modeling. Findings – The findings show a significant, direct and negative relationship between the relative usage level of online banking services and bank loyalty. However, a positive relationship was found to exist between bank loyalty and customer satisfaction with online service quality. An indirect positive relationship was also found to exist between services’ convenience through satisfaction with online banking service quality. Practical implications – The findings advance the idea that computer technology mediation reduces human interaction, and so may detract from customer loyalty. Service policy makers should invest in relation-based attachments with their online customers, enhance satisfaction with online quality service and sustain customer loyalty. Originality/value – Examination of the effect of variables related to online bank services usage and bank loyalty. This study contributes more value by understanding the effect of customers’ usage level of online services.

The Trend Toward Online Banking Services by Brick-and-Mortar Institutions

2011 ◽  
pp. 297-314
Author(s):  
Dianne J. Hall ◽  
Ray E. Whitmire ◽  
Steven D. Hall ◽  
E. Leon Knight
Keyword(s):  
United States ◽  
Financial Institutions ◽  
The United States ◽  
Online Banking ◽  
Online Services ◽  
Banking Services ◽  
Brick And Mortar ◽  
Changes Over Time ◽  
Over Time

Five hundred financial institutions in the United States were randomly sampled each year for five consecutive years in order to examine Internet participation, both evident at the time of the survey and planned by the selected financial institutions. Each year the selected institutions were surveyed regarding the existing involvement of their institution with online banking and that institution’s Internet plans for the following two-year period. This study examines changes over time in the responses of the surveyed institutions. The results show that, over the study period, the percent of respondents that had or planned an Internet present within two years of the survey increased from 52% in 1996 to over 90% in 2000, and that the number of online services offered to customers is increasing.

scholarly journals Factors affecting Palestinian customers’ use of online banking services

2019 ◽  
Vol 37 (2) ◽  
pp. 426-451 ◽  
Author(s):  
Mohammed Z. Salem ◽  
Samir Baidoun ◽  
Grace Walsh
Keyword(s):  
Technology Adoption ◽  
Banking Sector ◽  
Arab Countries ◽  
Online Banking ◽  
Security And Privacy ◽  
Online Services ◽  
Banking Services ◽  
Content Type ◽  
Factors Affecting ◽  
Technological Leadership

PurposeThe purpose of this paper is to examine factors that affect Palestinian customers’ use of online banking services.Design/methodology/approachAn empirical study was conducted using a questionnaire in order to test the hypotheses. The questionnaire was distributed to 500 respondents selected by the participating banks. A total of 369 complete questionnaires were returned. The study’s independent variables include technology adoption propensity, customers’ value for online personalization, customers’ privacy concern, e-trust, technological leadership and loyalty. Palestinian customers’ usage of online banking services is the dependent variable.FindingsThe results of the model tested clearly suggest that the use of online banking services is influenced, respectively, by the technological leadership, e-trust, e-loyalty, customers’ value for online personalization, customers’ concern for privacy and propensity of technology adoption. Finally, this paper suggests that policy makers should develop a prioritized hierarchy of actions in developing the effective use of bank’s online services, based on thet- andp-values of the latter mentioned factors.Research limitations/implicationsOne limitation of the study is relying on self-reported cross-sectional data collection, rather than longitudinal surveying. Despite such limitation, the study provides the Palestinian banking sector with recommendations to promote online banking services based on the empirically identified factors affecting such service adoption.Practical implicationsPalestinian banks should promote the adoption of online banking services by supporting personalization of services, privacy and trust. Customers should always be informed that their bank is among the first banks to introduce the latest state-of-the-art online services. Technology innovative and diverse online services should be offered by banks to attract customers.Originality/valueAlthough numerous research studies have studied the factors affecting customers in using electronic and online banking services, few studies have considered such usage in the developing countries, such as Arab countries in general and Palestine in particular. This is the first study to examine the factors affecting the adoption of online banking services in Palestine. This study provides empirical evidence to fill in the gap by providing a deeper understanding of the factors affecting the usage of online banking services in the country. The findings of this study can help decision makers in the Palestinian banks to develop practical plans that might accelerate and expand the adoption of online banking emphasizing personalized and trusted services offered with high level of security and privacy.

Customer Satisfaction on e-SERVQUAL in Islamic Online Banking Services

2017 ◽  
Vol 3 (2) ◽  
pp. 29
Author(s):  
NURHAZIRAH HASHIM ◽  
MOHAMMAD ZAIM MOHD SALLEH ◽  
NOR SARA NADIA MUHAMAD YUNUS ◽  
INTAN SYAFINAZ MAT SHAFIE
Keyword(s):  
Customer Satisfaction ◽  
Consumer Satisfaction ◽  
Pearson Correlation ◽  
Business Environment ◽  
Online Banking ◽  
Security And Privacy ◽  
Accurate Information ◽  
Online Services ◽  
Banking Services ◽  
Customer Information

The recent development in the ecommerce services has shown a variety of established companies participating in the web business environment including Islamic banks. Business with the mostexperience and success in using ecommerce are beginning to realize that the indicator of success or failure of the ecommerce environment was included in the online services. Nowadays, the trend ofa business is to serve the customer with best quality of services to enhance the consumer satisfaction and compete with the global competitors as online services enabled registered user to make productspurchase transaction only through website such as check and manage financial standing, transfer funds, bill payment, prepaid reload and so forth. However, in recent times, Islamic banking users faced problems with the online system such as cannot log in to the system, payment failure and  mostly security and privacy hindrance. Therefore, this study aimed to investigate the relationship between electronic service quality (e-SERVQUAL) and customer satisfaction towards IslamicOnline Banking Services users. Based on the sample size, only 76 respondents were selected to participate in this study by using a convenience sampling. Further, Pearson correlation and multipleregression were reported to analyze the mentioned relationship. The findings have shown that there is a positive relationship between e-SERVQUAL and customer satisfaction in using Islamic onlinebanking services. Based on the findings, Islamic online banking developer is recommended to improve more on their responsiveness in order to provide quick response to their customer’s requirements.  Moreover, they also should be more reliable in providing accurate information in performing the promised services. They must assure that all of their customers can quickly get responds and true feedback regarding their problems to ensure customer satisfy with service provided. Besides, the safety of the website and the protection of customer information alsoconsidered a vital action that should be concerned in order to increase the customers’ satisfaction.

Financial institutions mergers: a strategy choice of wealth maximisation and economic value

2020 ◽  
Vol 12 (4) ◽  
pp. 495-529
Author(s):  
Mohamad Hassan ◽  
Evangelos Giouvris
Keyword(s):  
Credit Risk ◽  
Event Study ◽  
Financial Institutions ◽  
Value Creation ◽  
Economic Value ◽  
Abnormal Returns ◽  
Study Analysis ◽  
Event Window ◽  
Content Type ◽  
Merger Announcement

Purpose This study Investigates Shareholders' value adjustment in response to financial institutions (FIs) merger announcements in the immediate event window and in the extended event window. This study also investigates accounting measures performance, comparison of post-merger to pre-merger, including several cash flow measures and not just profitability measures, as the empirical literature review suggests. Finally, the authors examine FIs mergers orientations of diversification and focus create more value for shareholders (in the immediate announcement window and several months afterward) and/or generates better cash flows, profitability and less credit risk. Design/methodology/approach This study examines FIs merger effect on bidders’ shareholder’s value and on their observed performance. This examination deploys three techniques simultaneously: a) an event study analysis, to estimate and calculate abnormal returns (ARs) and cumulative abnormal returns (CARs) in the narrow windows of the merger announcement, b) buy and hold event study analysis, to estimate ARs in the wider window of the event, +50 to +230 days after the merger announcement and c) an observed performance analysis, of financial and capital efficiency measures before and after the merger announcement; return on equity, liquidity, cost to income ratio, capital to total assets ratio, net loans to total loans, credit risk, loans to deposits ratio, other expenses and total assets, economic value addition, weighted average cost of capital and return on invested capital. Deal criteria of value, mega-deals, strategic orientation (as in Ansoff (1980) growth strategies), acquiring bank size and payment method are set as individually as control variables. Findings Results show that FIs mergers destroy share value for the bidding firms pursuing a market penetration strategy. Market development and product development strategies enable shareholders’ value creation in short and long horizons. Diversification strategies do not influence bidding shareholders’ value. Local bank to bank mergers create shareholders’ value and enhance liquidity and economic value in the short run. Bank to bank cross border mergers create value for bidders’ in the long term but are associated with high costs and higher risks. Originality/value A significant advancement over the current literature is in assessing mergers, not only for bank bidders but also for the three pillars FIs of the financial sector; banks, real-estate companies and investment companies mergers. It is an improvement over current finance literature because it deploys two different strategies in the analysis. At a univariate level, shareholder value creation and market reaction to merger announcements are examined over short (−5 or +5 days) and long (+230 days) windows of the event. Followed by regressing, the resultant CARs and BHARs over financial performance variables at the multivariate level.

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