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Article
Publication date: 1 December 1994

John Innes and Robert A. Lyon

An external management audit is an independent examination of anorganization resulting in a statement to external users on theperformance of the management function. A simulated…

1531

Abstract

An external management audit is an independent examination of an organization resulting in a statement to external users on the performance of the management function. A simulated corporate overdraft decision was posted to 354 bankers with three groups of 118 bankers receiving the same package of information but with different audit reports namely a financial audit report only, a favourable management audit report and an adverse management audit report. The response rate was 58 per cent (205 respondents). Conclusion overall that the bankers′ overdraft decisions were statistically significantly related to the addition of an adverse management audit report. The reasons given by the bankers for their corporate overdraft decisions also suggest that bankers would be interested in and would use external management audit reports.

Details

Accounting, Auditing & Accountability Journal, vol. 7 no. 4
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 14 November 2016

John Kevin Ashton

The study examines influence of behavioural economic theories of add-on goods and contingent charges on the regulation of two touchstone markets in the UK. These markets, the…

Abstract

Purpose

The study examines influence of behavioural economic theories of add-on goods and contingent charges on the regulation of two touchstone markets in the UK. These markets, the payment protection insurance (PPI) market and the market for overdrafts can both be characterised as add-on goods, have displayed excessive levels of profitability and been the focus of continuing and substantial public mis-trust. Despite these similarities, the regulatory treatment of these two markets has been very different. The purpose of this paper is to explore the context of these cases and examine why these differences in regulatory reporting have developed.

Design/methodology/approach

The research questions are examined through a detailed review of the regulatory reporting in the UK PPI and overdraft market. This review of over 20 regulatory reports, numerous enforcement actions, associated legal proceedings and related international evidence is employed to determine commonalities and differences in the regulatory actions proposed, motives adopted and success of these regulatory processes.

Findings

It is reported the dynamic and fragmented regulatory structure, multiple policy agendas and a successful legal intervention have all influenced how these financial services markets have been regulated and behavioural economic concepts applied. In particular aspects of overdraft markets remain challenging to address as it is still possible to exclude competition within aftermarkets. The regulatory intervention into PPI markets by contrast addressed concerns raised by add-on good theory and amended the form of distribution underlying this market more directly and successfully.

Originality/value

There have been numerous excellent reviews of behavioural economics and finance published on a diversity of topics. Despite such a wide coverage, a relatively under-researched aspect of this literature remains the application of these relatively new theoretical insights within markets and how these have influenced regulatory practice. This review of regulatory reporting addresses this gap in the literature through considering two of the most problematic financial services markets of the last decade in the UK.

Details

Review of Behavioral Finance, vol. 8 no. 2
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 12 March 2018

Sergio Da Silva, Newton Da Costa Jr, Raul Matsushita, Cristiana Vieira, Ana Correa and Dinorá De Faveri

A recent population-wide study for Germany, where credit lines on current accounts are available to 80 percent of the population, finds that overdraft debt is more likely for…

Abstract

Purpose

A recent population-wide study for Germany, where credit lines on current accounts are available to 80 percent of the population, finds that overdraft debt is more likely for people who give intuitive but incorrect answers on a cognitive reflection test. This suggests that those consumers in debt have poorer cognitive reflection and, thus, lack of self-control. The Germany study finds that “surprisingly, the level of income does not play a central role.” The purpose of this paper is to discriminate the consumers in terms of their income by considering two experiments.

Design/methodology/approach

In the first (pilot) experiment, the authors do not discriminate consumers in terms of income and, as result, replicate the Germany study. In a follow-up experiment, which assembles a high-quality sample of high-income consumers, the authors find debt can no longer be explained by poor cognitive reflection.

Findings

Apparently, high-income consumers treat debt as mere leverage, as companies do.

Originality/value

Not all consumer indebtedness can be caused by lack of self-control. High-income consumers are likely to contract debt as leverage. This resembles rational risk taking.

Details

Review of Behavioral Finance, vol. 10 no. 1
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 1 June 1994

Barbara R. Lewis, Jayne Orledge and Vincent‐Wayne Mitchell

Investigates service quality in the student market for financialservices. Reports empirical work in which students′ attitudes towardsthe service provided by their banks and…

3027

Abstract

Investigates service quality in the student market for financial services. Reports empirical work in which students′ attitudes towards the service provided by their banks and building societies were assessed, with emphasis on loan and overdraft arrangements. The students′ expectations and perceptions were measured using a graphic positioning scale and a number of service quality shortfalls were identified which have implications for organizations providing financial services to the student market. Highlights opportunities for further research in the area of measuring service quality.

Details

International Journal of Bank Marketing, vol. 12 no. 4
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 3 April 2018

MccPowell Sali Fombang and Charles Komla Adjasi

The study aims to examine the importance of access to finance in firm innovation by using firm-level data from the World Bank enterprise survey (WBES) on selected African…

5910

Abstract

Purpose

The study aims to examine the importance of access to finance in firm innovation by using firm-level data from the World Bank enterprise survey (WBES) on selected African countries.

Design/methodology/approach

This study utilises firm-level data from the WBES database and computes aggregate innovation index by using multiple correspondent analysis. The authors then apply instrumental variable models (to control for possible endogeneity between innovation and finance) to assess the link between finance and innovation.

Findings

The research finds that finance in the form of overdraft overwhelmingly drives innovation in all selected countries – Cameroon, Kenya, Morocco, Nigeria and South Africa. Trade credit enhances innovation among firms in Nigeria, South Africa and Cameroon, while asset finance drives innovation amongst firms in Cameroon, Nigeria and South Africa.

Practical implications

Policy incentives such as tax breaks could be put in place for financial intermediaries that have shown proof of extending loans to financially constraint firms to enable them to innovate. Furthermore, different financial institutions such as microfinance institutions can be supported to increase credit to enterprises. Partnerships with organisations willing to fund firms and support start-ups should be encouraged. One of such support mechanisms could be specialised schemes such as a credit guarantee scheme to encourage and secure lending to enterprises to promote innovation.

Originality/value

This paper provides empirical insights into how finance enhances innovation in African enterprises. It also shows how different finance structures (overdraft, asset finance and trade credit) affect firm innovation in different African countries.

Article
Publication date: 1 February 1993

Richard Dobbins

Sees the objective of teaching financial management to be to helpmanagers and potential managers to make sensible investment andfinancing decisions. Acknowledges that financial…

6356

Abstract

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

Details

Management Decision, vol. 31 no. 2
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 1 February 1991

Barbara R. Lewis and Graham H. Bingham

Findings are presented from an empirical investigation among theyouth market for financial services. Attention is focused on accountownership and use of services, together with…

Abstract

Findings are presented from an empirical investigation among the youth market for financial services. Attention is focused on account ownership and use of services, together with attitudinal data pertaining to banks and building societies and the services they provide; of particular interest is evidence of split banking and bank switching. Overall, the heterogeneity of the youth market with respect to needs, attitudes and behaviour is highlighted, and a number of implications for the marketing strategies of banks and building societies are suggested.

Details

International Journal of Bank Marketing, vol. 9 no. 2
Type: Research Article
ISSN: 0265-2323

Keywords

Book part
Publication date: 15 March 2021

Raimund Blache, Lars Fetzer, René Michel and Tobias von Martens

This chapter introduces the KontoSensor, a digital service offered by Deutsche Bank since September 2018, as an example of data processing using predictive analytics. We present…

Abstract

This chapter introduces the KontoSensor, a digital service offered by Deutsche Bank since September 2018, as an example of data processing using predictive analytics. We present the motivation behind this digital service, the use cases and methods currently implemented, the way they have been created, and measures to increase the usage of the KontoSensor. With KontoSensor, Deutsche Bank offers a digital service to its clients to analyze their transactions on their current accounts using methods from predictive analytics and to inform them when irregularities are found. Twelve months after the start, 90,000 clients are already using this service and experiencing the results of data science firsthand.

Details

The Machine Age of Customer Insight
Type: Book
ISBN: 978-1-83909-697-6

Keywords

Article
Publication date: 1 November 2001

Abdullah H. Aldlaigan and Francis A. Buttle

This study reports an empirical test of two involvement scales: Zaichkowsky’s personal involve‐ment inventory (PII) and Kapferer and Laurent’s consumer involve‐ment profile (CIP)…

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Abstract

This study reports an empirical test of two involvement scales: Zaichkowsky’s personal involve‐ment inventory (PII) and Kapferer and Laurent’s consumer involve‐ment profile (CIP). The purpose of this study is to identify whether these two scales are applicable to financial services. Eight financial services are investigated: the use of a cheque book, overdraft facility, the use of Switch services, the use of a cash machine, savings account, investment services, mortgage services, and personal loan. The empirical findings show that the two scales indicate different levels of involvement in the eight financial services. The PII measure indicates that mortgage, investment and cash machine use are high involvement services. The use of savings account, personal loan, a chequebook, overdraft facility, and Switch services are found to be medium involvement services. The CIP shows that investment, mortgage, and savings accounts are rated as high involve‐ment services. Personal loans, overdraft facilities, Switch card, cash machine, and chequebook usage are in the middle range of involvement. Being a multidimen‐sional scale, the CIP provides more data about involvement. More investigation is needed in order to understand the links between consumer involvement in financial services and customer behaviour. The authors conclude with recom‐mendations for further research into consumer involvement in financial services and its effect on bank customer behaviour.

Details

International Journal of Bank Marketing, vol. 19 no. 6
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 5 September 2019

Abdelmajid Amine and Sherazade Gatfaoui

The purpose of this paper is to explore how temporarily vulnerable customers and their bank advisors cope with incidents that occur over the course of their service relationships.

Abstract

Purpose

The purpose of this paper is to explore how temporarily vulnerable customers and their bank advisors cope with incidents that occur over the course of their service relationships.

Design/methodology/approach

A qualitative design based on ten case studies, involving interviews with both sides of the dyad (client–bank advisor) and internal secondary data from the bank, was conducted.

Findings

The findings show that the two sides of the dyad span a gradation of coping strategies that are enacted to solve the incidents encountered. Thus, temporarily vulnerable consumers turn out to be non-passive in their asymmetrical relationship with advisors and deploy residual resources to co-create solutions.

Research limitations/implications

The results enrich the knowledge of consumers’ vulnerability insofar as the authors extend the transformative service literature to temporarily vulnerable clients who project themselves beyond the crisis period and consider ensuring satisfactory levels of their well-being.

Practical implications

The findings suggest that banks can refine their categorization of vulnerable clients by identifying those that remain profitable and for which an effort is worth making, and those in whom it is appropriate to disinvest. They also prompt banks to design supports for the advisors in managing increased stressful interactions with precarious customers.

Social implications

To prevent the risk of slippage by or exclusion of, vulnerable customers who experience serious banking incidents, the paper points out the necessity to mobilize alternative levers from the public and associative spheres to allow these customers access to a minimum of banking services.

Originality/value

As an early exploration of transient vulnerable clients, this research fuels the understanding of their capacity to consider co-creating, alongside bank advisors, solutions to the incidents encountered with a view to preserving their well-being and ensuring their social and economic inclusion.

Details

Journal of Services Marketing, vol. 33 no. 5
Type: Research Article
ISSN: 0887-6045

Keywords

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