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The purpose of this paper is to identify the causes behind the failures of virtual banks. This work underscores the importance of the differing financial metrics in the virtual and brick and mortar banking channels, when analyzing bank failures.

“Probit” analysis on the failed virtual banks and the failed brick and mortar banks revealed that the interest incomes in both banks are significantly different. The non‐interest income and non‐interest expense (NIE) of the surviving banks and the failed banks are explored to examine the causes for failure.

Similar to previous research it was found that the brick and mortar banks failed due to bad asset quality, but the failure of virtual banks is mainly due to high NIEs. For virtual banks to succeed, the institutions must focus on controlling the burden.

A larger sample size would have been preferable and non‐availability of data limited the scope of the study. Continuing studies could explore the performance of Internet channels of existing brick and mortar banks.

This study accentuates the importance of the differing business models underlying the two banking channels (virtual banks and brick and mortar banks). These channel specific differences underscore the significance of the financial metrics in operational evaluation.

This is probably the first study to examine the causes of failures of virtual banks and contrast them with brick and mortar banks.

The purpose of this paper is to analyse and evaluate the effect of customer experience management (virtual interaction, physical interaction and service interaction) on customer loyalty in the banking industry.

The study followed an explanatory research design to sample 384 respondents. Stepwise regression analysis was used to validate the relevance of the study model.

The results indicated that there is a positive association between customer experience management and customer loyalty. The dimensions of customer experience management, namely virtual interaction, physical interaction and service interaction, were also found to be statistically significant in explaining customer loyalty behaviour.

The study practically influences the way banks and other financial institutions gain competitive advantage through managing the experiences of customers in a volatile business environment. At a time when banks are no longer the only providers of financial services, the study offers a road map to reduce portfolio purchasing and switching behaviour through enhanced experience management at all customer touch points.

The study presents an augmented model of customer experience management which is linked to consumer loyalty.

Technological advancements have catalyzed disruption in the banking sector. The impact of the metaverse on the banking sector is no exception. In view of this, the current paper aims to provide valuable insights into four key areas (i.e. corporate banking, retail banking, banking employees and public policy) that the metaverse could significantly disrupt.

Insights into four key areas of the banking sector that the metaverse could significantly impact were gathered from various invited contributors.

The invited contributors first introduce the association between their respective key areas with the metaverse. Subsequently, the opportunities and challenges relevant to the key areas were identified. Finally, future research agendas were proposed for the attention of all relevant stakeholders.

The metaverse's impact on key areas of the banking sector is discussed in this paper. Following the metaverse's potentially wide application in the banking sector, insights from the invited contributions offer great value to the relevant stakeholders.

Digital transformation has made enormous changes in the banking domain, where FinTech is the salient driving force inside it. Especially in the banking industry, Artificial Intelligence (AI) and Blockchain technology act as the most innovative technologies. Similarly, Chatbots in commercial banking and Robo-advisors in investment banking has shifted banks into the entire virtual environment. In this context, the main objectives of this chapter are: to determine the current application of AI and blockchain in the banking industry, to identify the challenges faced by banks in adapting AI and blockchain technology, and to provide new insights on future banking in the industry 5.0 in this digital era. This chapter discusses the application of two robotic platforms widely used in banking, chatbots, and Robo-advisors. Chatbots are more like frontline employees of banks who are commonly engaged in customer relationship management, sales, and marketing. In contrast, Robo-advisors are a relatively advanced AI tool involved in investment and portfolio management. Blockchain will accelerate digital transformation where a decentralized digital ledger system is used for banking transactions. However, this is entirely the opposite of conventional centralized digital banking, and the adoption of these technologies is still in its infancy. Employment, performance, security, privacy and trust, cost, ethical and regulatory challenges are the most common challenges. To avoid the challenges, banks should concern with strategies like collaboration with robots, increasing the platforms’ performance, etc. Finally, the chapter provides insights on banking at industry 5.0. In the future, banking customers can experience completely virtual and customer-oriented banking services. In this regard, the fusion of all technologies and collaborative human effort is essential.

The study sought to investigate factors that influenced Hong Kong bank customers’ adoption of four major banking channels, i.e. branch banking, ATM, telephone banking, and internet banking. Specifically, it aimed to focus on the influences of demographic variables and psychological beliefs about the positive attributes possessed by the channels.

Based on extant literature on bank marketing and interviews with ten bank managers in Hong Kong, a questionnaire was designed. Then, in a large‐scale survey by means of mall‐intercept and telephone interviews, we successfully obtained data from 314 bank customers.

Overall, ATM was the most frequently adopted channel, followed by internet banking and branch banking, and telephone banking was the least frequently adopted channel. Psychological beliefs about the extent to which a channel possessed certain positive attributes were more predictive of adoptions of ATM and internet banking than adoptions of branch banking and telephone banking. Demographic backgrounds were strongly associated with adoption of all banking channels except ATM. A major research implication is that the theory of reasoned action is less applicable when a behavior is habitual, such as the adoptions of branch banking and telephone banking.

The managerial implications are that telephone banking can be gradually phased out, whereas internet banking is becoming the dominant channel in the future. For branch banking, different marketing strategies should be adopted for those who are financially and cognitively less resourceful, and those who are wealthier but higher time cost.

The value of the study for bank managers is that it provides an updated account of the banking behaviors of Hong Kong bank customers.

With the liberalization and internalization of financial markets, in terms of the entrance of the World Trade Organization, banks in Taiwan face pressures in service quality and administrative efficiency. Predicting customers’ intention to adopt Internet banking is an important issue. Attempts to understand how an individual's belief, embracing attitude, subjective norm and perceived behavioral control, can influence intention. Two versions of the model of the theory of planned behavior (TPB) – pure and decomposed – are examined and compared to the theory of reasoned action (TRA). Data are collected from approximately 425 respondents and structural equation modeling is used to analyze the responses. Results generally support TRA and TPB and provide a good fit to the data.

This paper aims to explore the intention to adopt the Metaverse in Islamic banks, with a particular focus on evaluating perceived usefulness, ease of use, user satisfaction and the influence of religiosity. Integrating the technology adoption model (TAM) and religiosity intention model, this study will dissect the multidimensional aspects influencing the acceptance of Metaverse technologies.

Surveying Islamic bank professionals in Jordan, this study used a structured questionnaire and data augmentation to analyze Metaverse adoption factors. Using partial least squares-structural equation modeling, the relationships between ease of use, usefulness, religiosity and satisfaction were explored.

The study identifies pivotal relationships among perceived usefulness, ease of use, user satisfaction and religiosity in the context of adopting metaverse technologies in Islamic banks in Jordan. Evidence highlights the dominant role of perceived usefulness and ease in influencing both intention to use and satisfaction levels. Religiosity, while not a direct influencer, plays a collaborative role, underscoring a balanced mix of technological and religious elements that will potentially shape the adoption trajectory of metaverse technologies within this specific banking sector.

Integrating metaverse technologies in Islamic banks necessitates balancing technological advances with Sharia compliance. The study underscores the importance of aligning user experience with religious values and fostering innovation within Islamic ethical guidelines.

This study uniquely integrates the TAM and religiosity-intention model to explore metaverse adoption in Islamic banks, unveiling a nuanced interplay between technology and religious values. It offers practical insights for tailoring innovations in the Islamic financial ecosystem.

The purpose of this chapter is to determine the future trends in the retail payment market in Malta, and the manner in which the major stakeholders are set to respond to the potential that innovative technology within this area is unlocking. Stakeholders strive to keep abreast with developments within this ambit, in pursuit of implementing a proactive approach within their respective roles.

The objective of this study is achieved through a series of semi-structured interviews with the major stakeholders in the local retail payment market, mainly Financial Services Regulators, Supervisors and overseers as well as the Maltese Financial Services licence holders.

The evolution in the retail payment landscape witnessed in recent years exposes immeasurable challenges to Malta’s financial services sector and the economy at large. The conclusions derived from this research dovetail with the thorough literature review conducted, in exploring the manner in which such trends are envisaged to unfold within this sector. This study explores the legislative framework and regulatory regime, both current and proposed, which lay the foundations for the interplay between the respective stakeholders.

This study reveals the approach taken by the various stakeholders, as they each respond to such developments in the retail payment sphere. These are predominately driven by market forces endowed with a mix of opportunities, as each stakeholder strives to remain resilient towards future industry challenges. This research is conducive towards enhancing the much needed clarity and awareness in the local retail payment market, and promotes the use of innovative, secure and cost-efficient retail payment methods.

The purpose of this paper is to examine the identity and payment method verification procedures implemented by a number of popular massively multiplayer online games (MMOGs) and online financial service providers (OFSPs) to determine if the systems they currently have in place are sufficient to uncover the identities of those who may wish to use such environments to conduct money laundering or terrorism financing activity.

The paper investigates whether the payment instruments or methods used by account holders to place funds into their account(s) hinder or assist investigators to expose the real‐world identity of the account holder. The paper then discusses whether it is feasible and/or desirable to introduce know your customer (KYC) and customer due diligence (CDD) legislation into virtual environments and illustrates an effective KYC approach which may assist MMOGs and OFSPs to correctly identify their account holders, should legislation be put in place.

The systems currently in place by all of the MMOGs investigated are wholly inadequate to successfully establish the real‐world identities of account holders. None of the information required at the account setup stage is verified and, therefore, cannot be reliably associated with an account holder in a real‐world context. It appears that all three of the MMOGs investigated are leaving the serious matter of identity and payment method verification to the organisations that assist in the sale and purchase of their in‐world currency such as third party currency exchanges and Internet payment systems (collectively referred to as OFSPs). However, many of these OFSPs do not have adequate systems in place to successfully verify the identities of their account holders or users either. The authors' experiments show that it can be a very simple process to open accounts and perform financial transactions with all of the OFSPs investigated using publicly available or fictitious identity information and a prepaid Visa® gift card. Although all five OFSPs investigated in this research claim to verify the identity of their account holders, and may already be subject to KYC and CDD legislation, their systems may need some work to ensure that an account holder or user is accurately identified before financial transactions can take place.

The authors believe that the electronic KYC approach discussed in this paper deals effectively with the challenges of global reach, anonymity and non‐face‐to‐face business relationships experienced by virtual environment operators, thereby assisting in the effective detection and possible prosecution of individuals who wish to use these platforms for illicit and illegal purposes.

The purpose of this paper is to propose an object-oriented model of financial simulations which aims to test the applicability and suitability of the proposed measures of Basel III with respect to the prevention of banking crises.

The authors introduce an object-oriented model of financial simulations in the banking sector, namely, virtual banking (VBanking). The system is based on behavioural simulation of economic agents and allows for transactions between them, using various forms of financial assets. VBanking has been implemented as an automated stand-alone model, allowing for repetitive simulations under the same parameter sets, producing an efficient series of statistical data.

Interpretation of the resulting data suggests that some of the criticism against the proposed measures is justified, as neither economic crises nor contagion are diminished under Basel III. At the same time, the authors’ findings support that the stability goal is met, at least in part.

The model encompasses a relatively small part of the banking sector, while the authors choose not to deal with the production part of the economy. However, these limitations do not hinder the validity and importance of the authors’ findings.

The originality of this article lies in the use of an object-oriented behavioural model and in the resulting model application that is based on it. This enables the authors to run a series of simulations with different parameters, the results of which the authors can then compare. The authors’ findings can contribute to the authorities’ efforts to ameliorate the policies of Basel III.