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Article
Publication date: 2 May 2024

Muhammad Bahrul Ilmi, Muslim Har Sani Mohamad and Ros Aniza Mohd. Shariff

This study aims to investigate the growth of Indonesian Islamic banks and explores organisational growth determinants from different perspectives, namely, organisational climate…

Abstract

Purpose

This study aims to investigate the growth of Indonesian Islamic banks and explores organisational growth determinants from different perspectives, namely, organisational climate, intellectual capital (IC) and organisational service orientation. The study also attempts to develop a model to measure the growth of Islamic banks and uncovers the root causes of the stagnancy in Indonesian Islamic banking.

Design/methodology/approach

The study used survey questionnaires distributed to Islamic bank managers, who were considered representative experts in the field of Islamic banking. The data collected were analysed using the Statistical Package for Social Sciences (SPSS Version 21.0), and two analyses were performed with different strategies to build the regression model, namely, multiple linear regression and automatic linear regression.

Findings

The study found that IC significantly affected Islamic banks’ growth in Indonesia; however, organisational climate and service orientation did not predict such growth. Concerning service orientation as a mediating model, climate or IC had no indirect effect on growth.

Research limitations/implications

This study’s results contribute to fill the gap by analysing the growth of Islamic banks. Hence, the study results will be especially practical and helpful for Islamic bank managers and policymakers to help develop mechanisms for Islamic banks in Indonesia.

Originality/value

By combining the aspects of organisational climate, IC and service orientation from earlier studies and categorising them by organisational growth, together with a comprehensive literature review, the study proposes a model specific to Islamic banks. It also offers new insight and discussion for determining organisational growth in Indonesian Islamic banks.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 29 April 2024

Puneett Bhatnagr, Anupama Rajesh and Richa Misra

This study aims to develop a customer-centric model based on an online customer experience (OCE) construct relating to e-loyalty, e-trust and e-satisfaction, resulting in improved…

Abstract

Purpose

This study aims to develop a customer-centric model based on an online customer experience (OCE) construct relating to e-loyalty, e-trust and e-satisfaction, resulting in improved Net Promoter Score for Indian digital banks.

Design/methodology/approach

This study used an online survey method to gather data from a sample of 485 digital banking users, from which usable questionnaires were obtained. The obtained data were subjected to thorough analysis using partial least squares structural equation modelling to further investigate the research hypotheses.

Findings

The main factors determining digital banks’ OCE were perceived customer centrality, perceived value and perceived usability. Additionally, relevant constructs were evaluated using importance-performance map analysis.

Research limitations/implications

This study used convenience sampling for the urban population using digital banking services; therefore, the outcome may be generalized to a limited extent. To further strengthen digital banking, it would be valuable to imitate studies in other countries.

Originality/value

There is a lack of research on digital banking and OCE in India; thus, this study will help rectify this issue while providing valuable insights. This study differs from others in that it examines the connections between online customer satisfaction, loyalty, trust and the bottom line of financial institutions using these factors as dependent variables instead of traditional measures.

Details

International Journal of Quality and Service Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1756-669X

Keywords

Article
Publication date: 22 January 2024

Geetanjali Pinto, Shailesh Rastogi and Bhakti Agarwal

This paper aims to evaluate whether promoter holding influences a bank’s liquidity in India’s leading emerging market. Furthermore, it also evaluates the moderating role of…

Abstract

Purpose

This paper aims to evaluate whether promoter holding influences a bank’s liquidity in India’s leading emerging market. Furthermore, it also evaluates the moderating role of risk-weighted assets (RWA) on the relationship between promoter holding and liquidity.

Design/methodology/approach

The data consists of 24 banks for the period of 12 years from 2010 to 2021. Static panel data is used to analyze the relationship between the liquidity coverage ratio (LCR) as the dependent variable, the promoter used as an explanatory variable and RWA used as a moderating variable in this study.

Findings

This study concludes that an increase in promoter holding helps to improve the liquidity of Indian banks. Moreover, it also shows that using RWA as a moderating term enhances the relationship between promoter holdings and Indian banks’ liquidity.

Research limitations/implications

This study evaluated the impact of promoter ownership solely on the LCR, a statistic used to measure the short-term liquidity of banks in the Indian setting. Additional corporate governance factors, such as the makeup of the board of directors, relevant ownership concentration factors and external factors with the potential to affect the liquidity position of banks, could potentially be the subject of future investigations.

Practical implications

This paper has both managerial and policy-level implications. It shows that it is advantageous for banks’ ownership composition to include more enormous promoter holdings to enhance banks’ liquidity. Policymakers can, thus, formulate policies to encourage banks to have more extensive promoter holdings.

Originality/value

The impact of promoter ownership on bank liquidity has not been evaluated in earlier research projects. Furthermore, the use of RWA as a moderating variable to determine this link has not been fully investigated, particularly in the context of a developing country like India.

Details

Journal of Financial Regulation and Compliance, vol. 32 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 19 April 2024

Faisal Abbas, Shoaib Ali and Muhammad Tahir Suleman

This study examined how economic freedom and its related components, such as open markets, regulatory efficiency, rule of law and the size of government, affect bank risk…

Abstract

Purpose

This study examined how economic freedom and its related components, such as open markets, regulatory efficiency, rule of law and the size of government, affect bank risk behavior, focusing on the Japanese context.

Design/methodology/approach

The study employs a two-step GMM framework on the annual data of Japanese banks ranging from 2005 to 2020 to empirically test the hypotheses. Furthermore, we also use the ordinary least square method to ensure the robustness of our mainline findings.

Findings

The finding suggests that economic freedom increases the banks' risk-taking, thus making them fragile. The results also highlight that out of the four main subcomponents of economic freedom, regulatory efficiency and government size increase bank risk-taking, while the rule of law and open markets decrease banks' risk-taking. Additionally, we examine how the banks' specific characteristics affect the results by creating a subsample based on capitalization and liquidity ratios. Overall, the results are consistent with the baseline findings. Moreover, the results are robust to alternative proxy measures of risk.

Practical implications

The study's findings have several implications for regulators and policymakers. The results suggest that regulators and policymakers should reconsider their strategies for economic freedom to ensure that they promote stability in the banking system and reduce banks' risk-taking inclinations.

Originality/value

Although previous studies have examined the impact of economic freedom on bank stability and risk-taking, this study is the first to do so in the Japanese context, contributing to the literature by providing new insights and empirical evidence.

Details

The Journal of Risk Finance, vol. 25 no. 3
Type: Research Article
ISSN: 1526-5943

Keywords

Article
Publication date: 2 January 2024

Muhammad Muflih, Muhamad Zen, Radia Purbayati, Kristianingsih Kristianingsih, Hennidah Karnawati, Bambang Iswanto and Endang Hatma Juniwati

This study evaluates the integrative role of justice theory, religiosity, satisfaction and trust in influencing customer loyalty to Islamic mobile banking.

Abstract

Purpose

This study evaluates the integrative role of justice theory, religiosity, satisfaction and trust in influencing customer loyalty to Islamic mobile banking.

Design/methodology/approach

This study surveyed 370 customers who used Islamic mobile banking. The authors employed SEM-PLS to estimate the proposed model and answer the hypotheses.

Findings

Empirical facts show that distributive justice, procedural justice and interactional justice can increase loyalty through the role of satisfaction. On the other hand, distributive justice, procedural justice and religiosity can predict loyalty through the role of trust.

Practical implications

This study encourages Islamic mobile banking providers to improve the quality of benefit distribution, the application of procedures and interaction among all levels of users. In addition, religious education innovation is also important to increase customer activity in using Islamic mobile banking.

Originality/value

Until now, none of the studies have estimated the loyalty of Islamic mobile banking users based on the integrative roles of justice theory, religiosity, satisfaction and trust. It, therefore, highlights the originality of this study.

Details

International Journal of Bank Marketing, vol. 42 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Abstract

Details

Understanding Financial Risk Management, Third Edition
Type: Book
ISBN: 978-1-83753-253-7

Article
Publication date: 22 December 2023

Rafaela Nascimento Buhler, Fernando De Oliveira Santini, Wagner Junior Ladeira, Tareq Rasul, Marcelo Gattermann Perin and Satish Kumar

This study aims to synthesize and integrate findings from diverse research on the antecedents and moderators of customer loyalty in the banking sector. Through a comprehensive…

Abstract

Purpose

This study aims to synthesize and integrate findings from diverse research on the antecedents and moderators of customer loyalty in the banking sector. Through a comprehensive meta-analysis, the research seeks to understand the primary drivers of bank loyalty and the potential cultural, economic and social indicators that might influence these relationships.

Design/methodology/approach

A rigorous meta-analysis was conducted, analyzing 275 studies with 1,365 effect sizes involving over 134,000 bank customers from more than 50 countries. The research evaluated the effect sizes of the main relationships between loyalty antecedents and consequences and assessed the influence of cultural, economic and social moderators.

Findings

The study identified key antecedents of bank loyalty, with responsiveness, privacy, commitment, trust and empathy being paramount. Cultural dimensions, such as individualism and masculinity, significantly moderate the relationships between trust and loyalty. The human development index (HDI) was also identified as a significant economic moderator, particularly influencing the relationship between satisfaction and bank loyalty.

Originality/value

This research offers a holistic view of bank loyalty, bridging gaps from conflicting findings in prior literature. Examining a vast array of studies across diverse cultural and economic contexts provides empirical generalizations about bank loyalty behavior, offering valuable insights for academia and the banking industry.

Details

International Journal of Bank Marketing, vol. 42 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Open Access
Article
Publication date: 30 April 2024

Claudio De Moraes and André Pinto Bandeira de Mello

This work analyzes, through social-environmental reports, whether banks with higher transparency in social-environmental policies better safeguard financial stability in Brazil.

Abstract

Purpose

This work analyzes, through social-environmental reports, whether banks with higher transparency in social-environmental policies better safeguard financial stability in Brazil.

Design/methodology/approach

The analysis is carried out through a panel database analysis of the 42 largest Brazilian banks, representing 98% of the Brazilian financial system. Seeking to avoid spurious results, we followed rigorous methodological standards. Hence, we conducted an empirical analysis using a dynamic panel data model, we used the difference generalized method of moments (D-GMM) and the system generalized method of moments (S-GMM).

Findings

The results show that the higher the transparency of social-environmental policies, the lower the chance of possible stress on the financial stability of Brazilian banks. In sum, this study builds evidence that disclosing risks related to policies about sustainability can enhance financial stability. It is essential to highlight that social-environmental transparency does not have as direct objective financial stability.

Originality/value

The manuscript submitted represents an original work that analyzes whether banks with higher transparency in social-environmental policies better safeguard financial stability. Some countries, such as Brazil, have their potential for sustainable policies spotlighted due to their green territory and diverse natural ecosystems. Besides having green potential, Brazil is a developing country with a well-developed financial system. These characteristics make Brazil one of the best laboratories for studying the relationship between transparency in social-environmental policies and financial stability.

Details

EconomiA, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1517-7580

Keywords

Article
Publication date: 1 May 2024

Mohammad Mominul Islam and Mostofa Mahmud Hasan

While the Noble Quran dictates the prohibition of interest, conventional banks promote Islamic banking by opening Islamic banking windows. Against this backdrop, this study aims…

Abstract

Purpose

While the Noble Quran dictates the prohibition of interest, conventional banks promote Islamic banking by opening Islamic banking windows. Against this backdrop, this study aims to investigate the perceived gaps between managers and clients in Islamic marketing and banking, focusing on conventional banks’ Islamic banking windows.

Design/methodology/approach

Guided by a qualitative approach, semi-structured personal interviews and observations served as the data collection methods, involving 25 banks and 50 respondents in 3 different districts, namely, Shirajganj, Rajshahi and Chapainawabganj of Bangladesh from January to October 2023. The data were analysed using ATLAS.ti 2023 to explore codes and quotations derived from 14 interview questions. Further, ATLAS.ti 2023 facilitated synthesizing content, concepts, code occurrence, network analysis and thematic analysis.

Findings

Islamic and non-Islamic banks use Quranic verses, hadiths (prophetic traditions), images of mosques, the Kaaba and Arabic texts as Islamic marketing tools. These spiritual, divine and prescriptive tools are associated with Islamic banking. However, conventional banks receive criticism for having separate Islamic banking windows to serve religiously conscious clients, which generates tension among clients and bank managers.

Practical implications

The findings can theoretically assist academics in examining conventional banks’ Islamic marketing and banking practices, opening Islamic banking windows. Importantly, Shariah boards can play policy roles in safeguarding the function of Islamic marketing and banking. Managers can use the findings to anticipate client perceptions and enhance Islamic marketing and banking strategies. Likewise, the social implications include the explicit stance of Shariah to mitigate the mixture of halal and haram banking.

Originality/value

This pioneering study explores the perspectives of Islamic banking windows by non-Islamic banks. The combination of Islamic marketing and banking is a noteworthy novelty in this study and deserves recognition for its unique contribution to halal marketing and finance.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 4 January 2024

Mugabil Isayev and Omar Farooq

This paper aims to document the impact of shadow banking on non-performing loans (NPLs) of publicly listed banks in an international setting.

Abstract

Purpose

This paper aims to document the impact of shadow banking on non-performing loans (NPLs) of publicly listed banks in an international setting.

Design/methodology/approach

This paper uses the data from 27 countries and various estimation strategies to test the arguments presented in this paper. The sample covers the period between 2002 and 2020.

Findings

The empirical results suggest that banks headquartered in countries with high shadow banking activity have fewer NPLs than otherwise similar banks headquartered in countries with low shadow banking activity. The findings remain qualitatively the same in different sub-samples and after replacing the main variables with their alternate proxies. The paper also shows that this relationship is sensitive to bank-specific characteristics. Moreover, the paper also indicates that the stringency of banking regulations weakens the relationship between shadow banking and NPLs.

Research limitations/implications

The study’s data limitations prevent a detailed year-by-year analysis of NPLs and shadow banking, restricting insights into their evolving dynamics. In addition, the focus on country-level shadow banking data limits the exploration of how multinational banks’ activities in various jurisdictions impact individual banks’ NPLs.

Originality/value

The paper not only documents the effect of shadow banking on NPLs but also shows that the relationship between shadow banking and NPLs weakens as banking regulations become more stringent.

Details

Journal of Financial Regulation and Compliance, vol. 32 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

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