Dynamics of Information Acquisition: Does Investment in Information Technology Matter?

2022 ◽  
pp. 097491012110622
Author(s):  
Yaser Ahmed Arabyat ◽  
Omar G. Aziz
Keyword(s):  
Information Acquisition ◽  
Banking Sector ◽  
Stable Equilibrium ◽  
Banking System ◽  
Time Profile ◽  
It Investment ◽  
Long Run ◽  
Market Shares ◽  
Banking Market ◽  
Temporal Function

The purpose of the study is to develop a theoretical model to ascertain if the IT investment in the banking sector is capable of generating a new equilibrium with increased efficiency. The empirical strategy is to seek an indirect test for Jordanian banking sector by looking at the time profile of banking profits as a temporal function of IT investment. The study enquires if the banking sector, as an iterative process of credit allocation and information acquisition through IT investment, lead to a stable equilibrium? Does IT investment ensure stable market shares for Jordanian banks in the long run? The study finds that investment in IT has led the banking system in Jordan away from an efficient equilibrium. We also find that the banks in Jordan directly interact with each other, although they may have collusive arrangements with some of their rivals, this means the banking market is not fragmented.

scholarly journals Competition in the Brazilian loan market: an empirical analysis

2010 ◽  
Vol 40 (4) ◽  
pp. 831-858 ◽  
Author(s):  
Claudio R Lucinda
Keyword(s):  
Empirical Analysis ◽  
Banking System ◽  
Institutional Setting ◽  
Loan Market ◽  
Long Run ◽  
Banking Market ◽  
Time Periods ◽  
Long Run Equilibrium

The aim of this paper is to review some of the existing tests for competition in Brazilian banking, as well as to propose an alternative. After the description of the institutional setting of the Brazilian Banking system on this period, the competition tests on the literature were reviewed, beginning with the test proposed by Panzar and Rosse (1987). The market does not seem to be in long-run equilibrium, implying only the market does not seem to find itself in collusive outcome. The next step was to try a new methodology, applied by Moreno, Martínez and Ruiz (2006) for the Spanish banking market. On this methodology, in which the assumption of equality of conduct parameters between firms and time periods is relaxed, the results indicate that, for some firms and in some time periods, a cooperative conduct in fact is present.

scholarly journals The Degree of Competition in the UAE Banking Industry

2017 ◽  
Vol 4 (2) ◽  
pp. 1
Author(s):  
George Owusu Antwi ◽  
Rachna Banerjee ◽  
Amal Abeer Mohammed ◽  
Mariam Juma Muna-Habib
Keyword(s):  
Market Structure ◽  
Banking Sector ◽  
Monopolistic Competition ◽  
Banking Industry ◽  
Balance Sheet ◽  
Competitive Environment ◽  
Input Price ◽  
Financial Products ◽  
Long Run ◽  
Banking Market

This paper has made an attempt to assess the degree of competition (or market structure) in the UAE banking sector using the H-statistics established by Panzar-Rosse (1987). Data of six years (2009-2015) have been extracted from various balance sheet and income statements of the banks. Pooled OSL estimator was used to obtain the coefficient. The inputs prices were found to be significant except the input price of labor. Total asset was registered to be positively significant. All other variables were not significant. The results of the study reveal that the UAE banking market structure is characterized by the monopolistic competition. That is, banks earned their revenue as if operating under conditions of monopolistic competition during this period. A robust check was performed to test for validity of PR-model. The results yield E-statistic which is consistent with long-run equilibrium. It is believed that both the small and the larger banks operate relatively equal more in a competitive environment. We recommend that UAE should develop new financial products and services that will provide convenience to customers while improving profitability.

scholarly journals Loan Waivers and Bank Credit: Reflections on the Evidence and the Way Forward

2019 ◽  
Vol 44 (4) ◽  
pp. 198-210
Author(s):  
Sudha Narayanan ◽  
Nirupam Mehrotra
Keyword(s):  
Financial Distress ◽  
Large Scale ◽  
Banking Sector ◽  
Banking System ◽  
Well Being ◽  
Policy Instrument ◽  
Negative Consequences ◽  
Executive Summary ◽  
Long Run ◽  
Macroeconomic Implications

Executive Summary In the past decade, farm loan waivers have become a policy instrument to alleviate the financial distress of farmers. Despite agreement on the theoretical rationale for such debt forgiveness and its deep contextual relevance, many fear that in the long run, loan waivers might vitiate the repayment culture in the farm sector and undermine the financial status of banks. At present, critiques of large-scale loan waivers rest on limited evidence. This article reviews and synthesizes existing research and available data on the implications of loan waivers, especially for the flow of credit to farmers from banks. On most of the issues, such as farmer well-being and repayment culture, there seems to be mixed evidence on the consequences of debt waivers. Credible evidence on macroeconomic implications is limited, mainly on account of methodological challenges. This article concludes that even if loan waivers are an inappropriate strategy to support farm incomes in sustainable ways, the wide-ranging negative impacts on the formal banking sector are perhaps overstated. A more fruitful approach would be to focus on whether loan waivers can be designed to reduce the possible negative consequences for the formal banking system as well as for macroeconomic system. The article identifies three possible instruments—loan insurance products that will help banks cope with the consequences of large-scale defaults. Second, to explore the creation of a distress fund that will cushion state finances, should there be a need for debt waivers. Third, it would be useful to consider the operation of debt relief commissions to have an ongoing process for debt waivers.

scholarly journals Concentration and Competition in the Albanian Banking Sector

2015 ◽  
Vol 2 (1) ◽  
pp. 168 ◽  
Author(s):  
Eleana Lici ◽  
Irena Boboli
Keyword(s):  
Financial Services ◽  
Banking Sector ◽  
Market Competition ◽  
Banking System ◽  
External Financing ◽  
Low Level ◽  
Banking Market ◽  
The Government ◽  
High Level

Albania has a relatively new financial system, where banking system is the most developed financial service in our country, with a share of 94, 4% of the total financial services. This is a phenomenon of countries with emerging economies, which proves that there is greater reliance on the state economic development of the banking sector, by effecting from the households to the biggest investors and the government. As in any market, competition is important for the banking sector because, it affects the efficiency and the quality of services offered. Furthermore, competition in banking has also implications for other sectors of the economy. So, higher competition in the banking sector is found to be associated with a faster growth of other sectors of the economy that rely on external financing. The main goal of this paper is to understand the characteristics of competition in our banking system and study the relationship between the level of concentration and competition. We are going to measure the concentration by the “H” indices. The “H” (Herfindaflit) indices is a measure of the level of the concentration of the banking system of a country. A high level of the indices shows a high level of concentration and as a consequence a low level of competition. A low level of the indices shows a low level of concentration which is sign of a banking market with a high competition.

scholarly journals IMPROVING CONSUMER LENDING MODEL CLIENTS

2016 ◽  
Vol 2 (1) ◽  
pp. 245-249
Author(s):  
Лычева ◽  
Irina Lycheva ◽  
Молчанова ◽  
Vera Molchanova
Keyword(s):  
User Interfaces ◽  
Banking Sector ◽  
Banking System ◽  
Customer Base ◽  
Consumer Lending ◽  
Banking Market ◽  
The Russian Federation ◽  
Relationship Of ◽  
The Relationship

The dynamism of the ongoing reforms in the domestic banking sector, one way or another, concerns the relationship of banks with their clients. The customer base responds differently to the reform of the banking system: there is a category of clients who do not take the action of the Central Bank of the Russian Federation, they argue that the monopoly of state-owned banks will lead to a deterioration of service, reduction in quality of banking products and riskiness of banking operations. But there is another category of customers who are positive about the changes and consider increasing the state presence in the banking market of the natural course of development. They link these changes with the possibility of increasing the funding the most important sectors of the real sector of the economy: construction, metallurgy, mechanical engineering. The problem of the banking sector today and in previous periods is similar in many respects: banks still continue to search for the elusive Holy Grail - lasting relationships with customers. Despite the high technology, graphical user interfaces and marketing strategy for the implementation of the task is still unclear in many respects.

scholarly journals Essence of Competitiveness in the Banking Sector: The Status and Problems

2020 ◽  
Vol 11 (514) ◽  
pp. 324-330
Author(s):  
I. M. Viadrova ◽  
◽  
M. V. Morozov ◽  
Keyword(s):  
Banking Sector ◽  
Significant Proportion ◽  
Banking System ◽  
Competitive Environment ◽  
Banking Competition ◽  
Banking Market ◽  
The Status ◽  
Net Assets ◽  
Foreign Credit ◽  
Competitive Products

The article is aimed at closer defining the content of the concept of «bank competitiveness», as well as analyzing the status and problems of ensuring a competitive environment in the banking system of Ukraine. The essence of banking competition was researched and a critical analysis of approaches to understanding the concept of «bank competitiveness» was carried out. Under the concept of «bank competitiveness», it is proposed to understand the integral characterization, which will reflect the real and potential opportunities of the bank to create and promote competitive products and services that meet all customer requirements, occupy and maintain stable positions in the banking market. The analysis of the competitive environment in the banking sector of Ukraine was carried out. The distribution of net assets of banks by groups: State-owned, foreign, private and separately PrivatBank is also analyzed. The assessment of the level of concentration in the banking sector was carried out by calculating the Herfindahl-Hirschmann Index by the level of total and net assets, as well as by the market of deposits of individuals. According to the identified dynamics, an unambiguous conclusion was made that the banking sector of Ukraine is low-concentrated. In general, the analysis of the competitive environment showed positive tendencies and an increase in the competitiveness of banks. The problems that continue to adversely affect the level of competitiveness of banks are allocated as follows: significant proportion of the State-owned banks; problems in lending to big business, as well as the generally low level of capitalization of Ukrainian banks compared to foreign credit institutions; the insufficient number of products and services offered by banks compared to foreign banking markets.

scholarly journals Financial Technology: Development of Innovative Fintech Start-Ups and Its Application in Banking System of Uzbekistan

2021 ◽  
Vol 8 (9) ◽  
pp. 214
Author(s):  
Shamsiddin Amanullaevich Allayarov ◽  
Maktuba Ravshanova
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Technology Development ◽  
Banking System ◽  
Industrial Sector ◽  
Economic Relations ◽  
Banking Market ◽  
Economic Growth Rates ◽  
Start Ups ◽  
Financial Technology

In the context of globalization, labor migration, trade and capital movements, tourism, foreign investment, IT are affected by the economic growth rates of countries. Periodic disclosure of reforms in the new Uzbekistan, the beginning of socio-economic relations provided opportunities for modernization, technical and technological re-equipment of the industrial sector. In particular, the need for financial technology in commercial banks is important to conduct research in this area. The influence of fintech is beginning to be felt in the banking sector and capital markets. This article surveys its development and its impact on efficiency, banking market structure, strategies of incumbents and entrants, and financial stability.

TRANSFORMATION OF THE BANKING SECTOR IN THE CONTEXT OF DIGITALIZATION

2020 ◽  
Author(s):  
Ольга Юрьевна Кузьмина ◽  
Марина Николаевна Кичатова
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Quality Of Services ◽  
Banking Market ◽  
Competitive Relations

В статье рассмотрены основные аспекты происходящей эволюции банковской системы в условиях цифровизации экономики. Сделан вывод о наличии противоречивых тенденций в развитии банковского рынка, усиление процессов монополизации банковского сектора не способствует укреплению конкурентных отношений, что негативным образом отражается на качестве предоставляемых услуг потребителям. The article considers the main aspects of the ongoing evolution of the banking system in the context of digitalization of the economy. The conclusion is made that there are contradictory trends in the development of the banking market, and the strengthening of the processes of monopolization of the banking sector does not contribute to strengthening competitive relations, which negatively affects the quality of services provided to consumers.

scholarly journals The impact of the banking system concentration level and the pandemic on the Georgian banking sector

2021 ◽  
Vol 5 (1) ◽  
pp. 24-32
Author(s):  
Ana Guruli
Keyword(s):  
Economic Development ◽  
Banking Sector ◽  
Concentration Level ◽  
Negative Impact ◽  
Banking System ◽  
Banking Market ◽  
National Bank ◽  
Small Banks ◽  
The Government ◽  
The Impact

Introduction. The importance of the banking sector is vital for the economic development of any country, since it is the main structural unit of monetary use, which plays the greatest role in the development of the state. As in all markets, we are faced with competition in the banking market, which is characterized by certain specifics, since the main product is money that cannot be replaced by other goods, and the main purpose of competition is to gain an advantage among agents operating in the same market, which is reflected in the final profit. The more the banking market develops and the more diversified the services offered to clients, the more the role of competition in the banking sector increases. The spread of the pandemic not only impeded the development of healthy competition, but also called into question the normal functioning and development of the banking sector. Aim and tasks. The aim of the study is to determine the level of competition in the Georgian banking sector by the method of identifying total assets and net loans, which aims to identify the causes of the market concentration level and find solutions, as well as to determine and assess the shock effects of the pandemic, because The pandemic period has become an even bigger challenge for the Georgian banking sector, where most of the market players occupy a small volume of the market, the National Bank of Georgia is actively trying to keep up with the challenges, and in order to mitigate the negative impact caused by the pandemic Results. The results of the study showed the monopoly functioning of the market, which is an obstacle to the development of a competitive market, resulting in unhealthy functioning of the market and the development of a flexible banking system, which ultimately negatively affects the stability of the country's economic development. As for the post-pandemic situation, it has been dealt with quite positively in Georgia, with the management of loan and deposit portfolios successfully managed through a temporary supervisory plan developed by the government, which has not been followed by outflow of funds from banks and loan portfolio mismanagement. Conclusions. In conclusion, it should be noted that in a highly concentrated market, small banks should be promoted with various legislative benefits, which will lead to competition, it is possible to impose a so-called "Capital tax", which implies high demands on capital, it will allow small banks to develop in a healthy competitive environment. Despite the fact that no bank was disrupted during the virus shock in Georgia, the financial result was so unfavorable, it was damaged, the main reason for which was the provision of possible losses on loans, which amounted to a total of 1.22 billion GEL, the National Bank of Georgia is actively trying to keep up with the challenges.

scholarly journals BANK EFFICIENCY AND CONCENTRATION OF THE BANKING SECTOR IN THE CEE COUNTRIES

2019 ◽  
pp. 77-89
Author(s):  
Sylwester Kozak ◽  
Agata Wierzbowska
Keyword(s):  
Inflation Rate ◽  
Banking Sector ◽  
Banking System ◽  
The Other ◽  
Gdp Per Capita ◽  
Bank Capital ◽  
Bank Efficiency ◽  
Banking Market ◽  
Per Capita ◽  
The Relationship

The relationship between the structure of the banking market and efficiency of banks has been a subject of many studies for several decades. There is no uniform opinion on the correlation between these variables. The goal of the research is to investigate this relationship for 96 banks operating in eleven CEE countries in the years of 2005-2017. Bank efficiency scores are assessed with the SFA method and regressed with bank and macroeconomic characteristics. The results show that the efficiency of banks is positively affected by the concentration of the market on which they operate, as well as by the size of individual banks. This relationship is valid for all examined countries. Additionally, bank efficiency is positively impacted by improving the banking system. On the other hand, the GDP per capita, inflation rate and bank capital ratio are not conducive to bank efficiency.

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