Money at risk: climate change and performance of Canadian banking sector

PurposeIn the last few decades, the frequency and intensity of extreme weather events have increased in most parts of the world including Canada because of global warming. The global warming in Canada is about double the magnitude of global warming; therefore, policymakers are concerned about the potential significant impact of the weather catastrophes on the economy and financial sector. The purpose of this study is to explore the impact of weather catastrophes on the Canadian banking sector.Design/methodology/approachUsing a sample of banking firms from Canada over the period 1988–2019, the present study estimates different econometric techniques to investigate the impact of weather catastrophes on the risk and performance of Canadian banks.FindingsAnalyses of the study do not find a significant impact of the weather catastrophes on the performance of the Canadian banks; however, it has helped banks to lower their risk level and improve stability due to proactive risk management. The findings of this study are not consistent with concerns of the policymakers about climate risk to the Canadian bank sector. More sector-specific research and policy initiatives are recommended to minimize the future financial risk of the increased frequency and intensity of natural disasters.Originality/valueThe study contributes to support the notion that the climate risk of banks is protected with insurance and reconstruction activities provide more banking opportunities.

An analysis of the impact of implementing a new interactive voice response system (IVR) on client experience in the Canadian banking industry

Banks are constantly competing to find new ways to satisfy clients and meet their growing, heterogenous needs. Clients can access round the clock banking services worldwide. One way to access information is through Interactive Voice Response (IVR) systems. This research is an analysis of the process of implementing an IVR system and the impact on client experience using the case study of a Canadian bank. The research question is: “What is the impact of an IVR system upgrade on client experience in the Canadian banking industry?” The Productivity Paradox and the Unified Theory of Acceptance and Use of Technology model (UTAUT) are leveraged and a thematic analysis of the feedback provided from Net Promoter Score (NPS) surveys is done. The results show that although the IVR system can be an attractive automation interface for clients, there are many unanswered concerns about customer satisfaction as demonstrated by NPS feedback.

An analysis of the impact of implementing a new interactive voice response system (IVR) on client experience in the Canadian banking industry

Banks are constantly competing to find new ways to satisfy clients and meet their growing, heterogenous needs. Clients can access round the clock banking services worldwide. One way to access information is through Interactive Voice Response (IVR) systems. This research is an analysis of the process of implementing an IVR system and the impact on client experience using the case study of a Canadian bank. The research question is: “What is the impact of an IVR system upgrade on client experience in the Canadian banking industry?” The Productivity Paradox and the Unified Theory of Acceptance and Use of Technology model (UTAUT) are leveraged and a thematic analysis of the feedback provided from Net Promoter Score (NPS) surveys is done. The results show that although the IVR system can be an attractive automation interface for clients, there are many unanswered concerns about customer satisfaction as demonstrated by NPS feedback.

DYNAMICS OF MAIN INDICATORS OF THE CANADIAN BANKING SYSTEM

Relevance of research. During the global financial collapse of 2008–2009, Canadian banks demonstrated stability and vastly avoided the international crisis. There was a view that Canada’s banking system was strict and overly risk-oriented, but after the crisis, it was recognized as logical in terms of lending, which required careful government supervision and regulation based on the principles of security and reliability. In fact, the World Economic Forum recognizes Canadian banks as the most stable in the world. So, all mentioned above prompted us to study the dynamics of the main indicators of the Canadian banking system. The aim of the study is to summarize and characterize the existing trends of banking system evolution in Canada. Methodological basis of the study is based on the analysis of the study of the Canadian banking system according to the indicators of the number of banking institutions, their profitability / loss, the quality of the loan portfolio and analysis of the largest banks in the country. A systemic analysis of the quantitative and qualitative composition of the above-mentioned banking indicators, synthesis and generalization were used to generalize and formulate conclusions. Scientific results. This article is devoted to the study of the dynamics of the main indicators of the Canadian banking system during the period from 2000 to 2019 inclusively. It is argued that the number of commercial banks has had a positive dynamics during the analyzed period, even the period of the global financial crisis of 2008-2009 has not reduced their number, which indicates the stability and prudent policy of commercial banks and the Central Bank as a whole. It has been established that 2019 is the year of the historical maximum assets of the Canadian banking system (more than 277% of Canada’s GDP). It is shown that the assets of eight largest banks in Canada account for 91% of the total assets of the banking sector. A record decline in the bank’s profits was recorded in 2009. The quality of the loan portfolio of commercial banks in Canada since 2009 shows a significant decrease in the share of outstanding loans. The practical significance of the study is to rate the strengths and weaknesses of the Canadian banking system. Significance / originality. The results achieved form an integrated view of the functioning of the Canadian banking system. The following studies will focus on methods and models for verifying the stability of banking systems, including the Canadian banking system.

Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses

This study investigates the Canadian banking industry profitability and seeks to determine if there is evidence of market power hypothesis (MPH) and/or efficiency structure hypothesis (ESH) in the industry. Using GMM and data from 2006 to 2018, it finds no support for the structure-conduct-performance (SCP) component of MPH. However, evidence of relative market power (RMP) in the industry reflects partial support for MPH, implying that banks that offer differentiated products are able to exercise market power, increase market share, and achieve better profitability. The lack of support for X-efficiency (ESX) and scale efficiency (ESS), which are components of ESH, indicates no support for the ESH. The finding that QLH holds in the industry suggests the level of competition is inadequate and that managers in the industry exhibit suboptimal behaviour. Therefore, increasing the level of competition in the industry will stimulate managerial effectiveness. Findings relating to the control variables show that spread impedes profitability, whereas capitalization and the joint influence of spread and liquidity risk have facilitating effects. Credit risk is immaterial to profitability however, the effect of economic growth can be positive. This study provides a better understanding of the industry, which is important to managers, regulators, and policy makers. The robustness checks affirm the consistency of the findings and policy implications.

“I Can’t Help at Work! My Family Is Driving Me Crazy!” How Family-to-Work Conflict Diminishes Change-Oriented Citizenship Behaviors and How Key Resources Disrupt This Link

This study investigates how employees’ experience of family-to-work conflict might turn them away from change-oriented citizenship behaviors, as well as how this negative link might be buffered by two relational resources (social interaction and goodwill trust) and two organizational resources (distributive and procedural justice). Data collected among employees in the Canadian banking and financial services sector reveal that negative interferences of family with work reduce the likelihood that employees undertake voluntary behaviors that alter and improve the organizational status quo; this effect is weaker though when employees maintain informal relationships with their peers, believe that peers do not take advantage of them, and regard organizational decision-making procedures as fair. The results do not support a buffering effect of distributive justice. This study thus pinpoints different ways organizational change professionals can reduce the risk of diminished change-oriented voluntarism, as might arise due to the spillover of family-related strain into the workplace.

Canadian Banking Stability through the Global Financial Crisis of 2007–8

One of the leading explanations for Canadian banking stability through the global financial crisis of 2007–08 is the Concentration-Stability Hypothesis (CSH), according to which the oligopoly of Canadian finance stabilised the credit system by cushioning it with above-average profits. These provided a buffer against fragility and incentives against excessive risk-taking. In this article, I critically examine CSH and show that classical Marxian analysis more effectively illuminates Canadian banking stability. I demonstrate that robust corporate profitability and capital accumulation before the crisis strengthened the balance sheets of the banks and supported them through those turbulent years. Thus, financial stability is linked explicitly to broader economic stability, and the latter is linked to the profitability of business enterprise.