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Article

Rehan ul‐Haq and Barry Howcroft

The purpose of the paper is to explain how and why strategic alliances, in the form of clubs and consortiums, played an important role in the internationalisation of banks.

Abstract

Purpose

The purpose of the paper is to explain how and why strategic alliances, in the form of clubs and consortiums, played an important role in the internationalisation of banks.

Design/methodology/approach

A longitudinal analysis, commencing in 1964 with the emergence of the Eurocurrency market and culminating with the creation of the European single market in the early 1990s, is used to provide an insight into the creation of clubs and consortium banks. The authors adopt the Lawson realist methodology and identify broad structural changes in the markets in which banks operate, i.e. “mechanisms” and relate these to major trends, i.e. “events” such as the creation of strategic alliances.

Findings

It is generally recognised that banks became international in response to the globalisation strategies of their multinational customers. However, the paper reveals that banks were also internationalising in response to structural changes in the financial services markets.

Research limitations/implications

A criticism of the Lawson methodology is that it is not always possible to discern causal linkages between mechanisms and events. This explains why research of this kind is typically retrospective because it is only with the benefit of hindsight that the causal linkages can be fully understood.

Originality/value

The study provides new insights into the emergence of international banking and the role of clubs and consortiums in this process.

Details

International Journal of Service Industry Management, vol. 18 no. 2
Type: Research Article
ISSN: 0956-4233

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Article

Lukasz Prorokowski

This paper aims to discuss ideas of factoring in external loss data to the internal loss data sets to obtain a true picture of operational losses for non-bank financial…

Abstract

Purpose

This paper aims to discuss ideas of factoring in external loss data to the internal loss data sets to obtain a true picture of operational losses for non-bank financial services firms, focusing on a case study of the interdealer brokers business and a specific Basel II category of the operational risk capital charges. As it transpires, financial services firms are increasingly required by regulators to merge external loss data with their internal data sets when using a loss distribution approach. However, there is a significant constrain on the availability and completeness of the external data for non-bank financial services firms.

Design/methodology/approach

Embarking on a modified Kaplan-Meier method is a clever way of factoring in external loss data into the internal data set. It allows non-bank financial firms to choose which fragments of the data constitute “the best fit”. In choosing the external data, this paper posits that such firms need to rely on loss-type events that display similar patterns in probabilities of occurrence. This method eliminates over-reliance on the external data that are specific for a different entity. One of the most important assumption underpinning the method presented in this paper is the fact that constant time intervals between the recorded operational loss events are assumed. Hereto, reaching a certain level of loss is used as the event of interest in both groups. For simplification purposes and to eliminate the noise and capture significant losses, we set this level as a multiplicity of the interdealer broker’s loss threshold.

Findings

Obtaining external loss data is difficult for the non-bank financial services firms. Furthermore, institutions operating as interdealer brokers are exposed to different levels of operational risk that affect their own Advanced Measurement Approach to capital charges under Basel II. The existing consortium data sets are not suitable for non-bank financial institutions. With this in mind, the non-bank firms should select only the parts of the external data that fit their business environment.

Originality/value

This paper should be of interest to any financial services firms that is required by regulators to merge its internal loss data sets with external loss data. Furthermore, this paper makes strong recommendations for regulators who should understand that the contemporary operational risk consortium data sets are not suitable for non-bank financial services firms.

Details

The Journal of Risk Finance, vol. 16 no. 5
Type: Research Article
ISSN: 1526-5943

Keywords

Content available
Article

Soonduck Yoo

In Korea and abroad, this paper investigates the use of blockchains in the financial sector. This study aims to examine how blockchains are applied to the financial sector…

Abstract

Purpose

In Korea and abroad, this paper investigates the use of blockchains in the financial sector. This study aims to examine how blockchains are applied to the financial sector and how to respond to the Korean conditions.

Design/methodology/approach

This paper investigates the movements of the financial sector and related services using the blockchain in the current market.

Findings

First, as a result of examining domestic and foreign cases, it can be seen that the areas where blockchains are most actively applied in the financial sector are expanding into settlement, remittance, securities and smart contracts. Also, in Korea, many of the authentication procedures based on the equipment possessed by the consumers are used so that introduction of the blockchain in the authentication part is prominent. Second, the move to introduce a closed (private) distributed ledger that does not go through the central bank is accelerating in payments between banks. Third, domestic financial institutions also need joint action by financial institutions through a blockchain consortium to apply blockchain technology to the financial sector. Fourth, consumer needs and technological developments are changing. At the same time, as the opportunity to infringe on the information held by individuals has expanded, the need for blockchain technology is strongly emerging because of the efforts of the organizations to defend it.

Originality/value

This paper contributes to understanding the changes in the financial sector using the blockchain.

Details

Asia Pacific Journal of Innovation and Entrepreneurship, vol. 11 no. 3
Type: Research Article
ISSN: 2071-1395

Keywords

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Book part

Ira W. Lieberman

Russia's size – both in terms of population and geography, spanning 11 time zones, 89 oblasts (states or regions) and autonomous republics and its privatization program…

Abstract

Russia's size – both in terms of population and geography, spanning 11 time zones, 89 oblasts (states or regions) and autonomous republics and its privatization program, encompassing some 100,000 small-scale enterprises, 25,000 medium to large firms, and 300 or so of its largest firms, made its privatization program the largest sale/transfer of assets conducted among the transition economies, with the possible exception of China. Comparisons by many of the program's critics, and there are many, to Poland, Hungary, or the Czech republic are invidious, especially the latter two countries whose populations are similar to just that of greater Moscow.

Details

Privatization in Transition Economies: The Ongoing Story
Type: Book
ISBN: 978-1-84950-513-0

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Article

Jarunee Wonglimpiyarat

This paper aims to explore FinTech and its dynamic transitions in the banking industry. In particular, the study analyses the systemic innovation nature of FinTech-based…

Abstract

Purpose

This paper aims to explore FinTech and its dynamic transitions in the banking industry. In particular, the study analyses the systemic innovation nature of FinTech-based innovations. The main contribution of this research study is the development of systemic innovation model which can be used as a dynamic tool to track the progress and pattern of technology development and diffusion. The research also discusses the latest financial innovation of PromptPay FinTech – the e-payment system in Thailand.

Design/methodology/approach

This research uses the case study approach to analyse the systemic innovation characteristics of FinTech-based innovations. This research offers a new systemic innovation model which is developed and can be used as a dynamic tool to track the progress and pattern of technology development and diffusion. The study uses FinTech-based innovations as case study samples to gain a better understanding concerning the systemic characteristics and the pattern of technology diffusion under the analytical framework of systemic innovation model. This research involves qualitative interviews with five major commercial banks in the financial services industry of Thailand.

Findings

The analyses of findings show the systemic characteristics of FinTech-based innovations in the banking industry, both at a global scale and Thailand case. The analyses have shown that systemic characteristics of the innovation process are the outcome of interactions between the complexity of the innovation and the capabilities of innovators in managing the innovation. The insightful implications on the systemic nature of innovation give the trend and direction of FinTech-based innovation development in the banking industry.

Originality/value

The main contribution which shows originality and value of this paper is the development of systemic innovation model. This research study develops a systemic innovation model to analyse the systemic characteristics which can be applied to all innovations in any industry. The model can also help track the progress and pattern of technology development and diffusion. Therefore, the model can be used to project the trend and diffusion of innovation competition in the banking industry.

Details

foresight, vol. 19 no. 6
Type: Research Article
ISSN: 1463-6689

Keywords

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Case study

Bala Bhaskaran

After a successful discussion and analysis of the case, the participants will be able to distinguish and appreciate the situations of conflict of interest (COI)…

Abstract

Learning outcomes

After a successful discussion and analysis of the case, the participants will be able to distinguish and appreciate the situations of conflict of interest (COI), whistle-blowing, etc. Initiate appropriate methods to avoid/minimize the impact of COI and ensure justice and fair-play to all stake-holders. Identify and appreciate the work-context of each executive-position and initiate standard operating procedures to protect the interests of the enterprise and all its stakeholders. Appreciate the relevance of whistle-blowing and to initiate appropriate methods to ensure justice and fair-play to all stake-holders.

Case overview/synopsis

In the context of the Industrial Credit and Investment Corporation of India (ICICI)-bank, the systemic inadequacies seemed to have failed in preventing the incidences of COI. The organization was too centralized to be able to respond proactively to the allegations. The case lays bare the inadequacy of professionalism among the media in responding promptly to such instances. The case generalizes that, with increasing globalization, such incidences have global ramifications and the organizations face much greater risks than ever. The case concludes that to emerge as a mature and leading organization in the global market, ICICI-bank needed to strengthen various aspects of corporate governance; similarly to emerge as a developed economy, India needed to develop independent watchdogs to monitor the activities of corporations continuously. Media needed to be independent and mature to fulfil its duty of continuous and transparent communication to the public.

Complexity academic level

The case can be understood and analysed by management students in the post-graduate level or by working executives with at least four to five years of experience in the corporate sector.

Supplementary materials

Teaching notes are available for educators only.

Subject code

CSS 11: Strategy.

Details

Emerald Emerging Markets Case Studies, vol. 11 no. 1
Type: Case Study
ISSN: 2045-0621

Keywords

Content available
Article

JaeShup Oh and Ilho Shong

Blockchain is a distributed ledger, in which the blocks containing transaction details are connected chronologically to form a series of chains, thus raising the…

Abstract

Purpose

Blockchain is a distributed ledger, in which the blocks containing transaction details are connected chronologically to form a series of chains, thus raising the possibility of improving the process and innovating business model for the financial institutions. The purpose of this paper is to study the actual cases of Blockchain applied in Korea in 2017, so that a vision of business model innovation of financial institutions can be drawn.

Design/methodology/approach

The financial institutions in Korea are in the technology verification stage to introduce Blockchain technology. Since there is an insufficient amount of actual measurement data, case study method was adopted. The authors interviewed ICT officers of major banks in Korea. The purpose of the interview was to understand the relationship between Blockchain and business models of financial institutions, and the effects and challenges that Blockchain has on the business model of financial institutions.

Findings

From the perspective of financial institutions, the emergence of Blockchain does not just have technical significance – emergence of highly efficient database system – but has the possibility that if the business model of existing financial intermediaries disappears or get reduced, the financial services relying on them can disappear altogether, or some of them can be replaced, and financial transaction patterns of consumers can be changed. As a case studies researched for this paper, it was discovered that the distributed characteristic of Blockchain cannot be applied when actually developing financial services.

Details

Asia Pacific Journal of Innovation and Entrepreneurship, vol. 11 no. 3
Type: Research Article
ISSN: 2071-1395

Keywords

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Article

Caălin Guraău

Internet banking is one of the newest Internet technology applications, which promises multiple benefits both for the financial institutions and for clients. In the last…

Abstract

Internet banking is one of the newest Internet technology applications, which promises multiple benefits both for the financial institutions and for clients. In the last five years a large number of banks have launched Web sites, offering online banking services. While the implementation and the functioning of these digital systems seem to be relatively smooth in the developed economies, the situation may be different in countries with economies in transition. The present paper investigates and analyses the present situation of online banking in Romania, and the appropriate strategies for the successful implementation and development of online banking services in the Romanian context.

Details

International Journal of Bank Marketing, vol. 20 no. 6
Type: Research Article
ISSN: 0265-2323

Keywords

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Article

Armin Varmaz and Jonas Laibner

This paper aims to empirically analyze the success of European bank mergers and acquisitions (M&As) by an analysis of the shareholder value implications of stock market…

Abstract

Purpose

This paper aims to empirically analyze the success of European bank mergers and acquisitions (M&As) by an analysis of the shareholder value implications of stock market reactions to announced and canceled M&As in the period from 1999 to 2015.

Design/methodology/approach

The analysis of a sample of 467 announced and 54 canceled European bank M&As is conducted using event study methodology. The determinants of the shareholder value creations in M&A are observed in cross-sectional regressions. The likelihood of M&As being canceled is estimated in logit regressions.

Findings

The paper finds that European bank M&As have not been successful in terms of shareholder value creation for acquiring banks, whereas targets experienced significant value gains. Abnormal returns for bidders and targets exhibit the same characteristics upon the announcement of M&As that are canceled at a later date, whereas the results for transaction cancelations deviate. Targets experience negative abnormal returns at a larger size than upon the transaction announcement. The findings for bidders are striking, as they destroy shareholder value upon the transaction cancelation, also, consequently they suffer twice. In particular, banks with higher profitability, higher efficiency and lower liquidity experience negative abnormal returns around the announcement dates. Negative abnormal returns prior to the transaction announcement and provision for loan losses increase significantly the likelihood of M&A cancelation.

Originality/value

This paper contributes to the literature expanding existing analyses to the shareholder value implications of canceled European bank M&As in a 17-year long time period. The findings reveal the destructive characteristics of canceled bank M&As and provide innovative insights into European capital market reaction to canceled M&As.

Details

The Journal of Risk Finance, vol. 17 no. 5
Type: Research Article
ISSN: 1526-5943

Keywords

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Article

Richard Lovell and Nick French

Studies the effects of the downturn in the property market in thelate 1980s on banking business practices and the banks′ consequentreassessment of their reliance on…

Abstract

Studies the effects of the downturn in the property market in the late 1980s on banking business practices and the banks′ consequent reassessment of their reliance on loan‐to‐value ratios for lending purposes. Looks at the philosophy underlying the RICS′s publication, in September 1995, of new valuation guidance notes and highlights the importance of the new requirements placed on the valuer.

Details

Journal of Property Finance, vol. 6 no. 4
Type: Research Article
ISSN: 0958-868X

Keywords

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