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Article
Publication date: 3 July 2017

Lukas Prorokowski

To explain the shadow banking regime that will be enforced in the European Union by local regulators starting in January 2017.

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1222

Abstract

Purpose

To explain the shadow banking regime that will be enforced in the European Union by local regulators starting in January 2017.

Design/methodology/approach

Recognising the regulatory-induced difficulties in the process of identifying certain types of clients (investment funds) as shadow banking entities, this article provides a decision tree for the shadow banking classification process in order to aid the impacted institutions with the assessment of their clients. With this in mind, the article advises the impacted institutions on the specific steps that should be taken when assessing investment funds for shadow banking flags. Furthermore, the article provides insights into the information required to conduct the shadow banking classification process.

Findings

The regime requires the impacted institutions to assess their clients for shadow banking flags in order to impose limits on credit lines to clients classified as shadow banking entities. The US regulatory jurisdiction will be impacted over a longer term.

Originality/value

The recommendations in this article will be especially useful for investment funds to ensure that the relevant information is clearly stated in their prospectuses in order to avoid being classified as shadow banking entities.

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Article
Publication date: 1 April 2014

Felix Rioja, Fernando Rios-Avila and Neven Valev

While the literature studying the effect of banking crises on real output growth rates has found short-lived effects, recent work has focused on the level effects showing…

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1441

Abstract

Purpose

While the literature studying the effect of banking crises on real output growth rates has found short-lived effects, recent work has focused on the level effects showing that banking crises can reduce output below its trend for several years. This paper aims to investigate the effect of banking crises on investment finding a prolonged negative effect.

Design/methodology/approach

The authors test to see whether investment declines after a banking crisis and, if it does, for how long and by how much. The paper uses data for 148 countries from 1963 to 2007. Econometrically, the authors test how banking crises episodes affect investment in future years after controlling for other potential determinants.

Findings

The authors find that the investment to GDP ratio is on average about 1.7 percent lower for about eight years following a banking crisis. These results are robust after controlling for credit availability, institutional characteristics, and a host of other factors. Furthermore, the authors find that the size and duration of this adverse effect on investment varies according to the level of financial development of a country. The largest and longer-lasting decrease in investment is found in countries in a middle region of financial development, where finance plays its most important role according to theory.

Originality/value

The authors contribute by finding that banking crisis can have long-term effects on investment of up to nine years. Further, the authors contribute by finding that the level of development of the country's financial markets affects the duration of this decrease in investment.

Details

Journal of Financial Economic Policy, vol. 6 no. 1
Type: Research Article
ISSN: 1757-6385

Keywords

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Article
Publication date: 8 March 2013

Yusniza Kamarulzaman and Azian Madun

The rapid growth of Islamic banking in Malaysia warrants banking institutions being more proactive and innovative in marketing their products. The purpose of this paper is…

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13480

Abstract

Purpose

The rapid growth of Islamic banking in Malaysia warrants banking institutions being more proactive and innovative in marketing their products. The purpose of this paper is to re‐evaluate the progress and achievements of Islamic banking in Malaysia, particularly in the area of sales and marketing of Islamic banking services.

Design/methodology/approach

This paper adopts a comprehensive literature review from various published sources. All related references were discovered through electronic databases, journals and books in the area of the relevant literature in Islamic finance, banking and services marketing.

Findings

The driving force for the growth of Islamic banking and financing products is the corporate clients, and not the Muslim individuals. In fact, the non‐Muslim individuals also use Islamic banking if they find that the service is good and meets their expectations. This paper shows evidence that the marketing activities of Islamic banking products is relatively ineffective compared to the conventional banking products in Malaysia. This paper also discusses the reasons for the ineffectiveness of marketing Islamic banking products at the micro and macro‐level. Depending on religion alone is not the best strategy to attract customers.

Practical implications

The products offered by the Islamic banking system have to compete with those of the conventional banking system. Hence, a continuous review of marketing strategies for Islamic banking products is crucial in every Islamic financial institution.

Originality/value

This paper fulfils a need to study whether the common methods in marketing conventional banking products would be effective in the context of marketing Islamic banking products.

Details

Business Strategy Series, vol. 14 no. 2/3
Type: Research Article
ISSN: 1751-5637

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Article
Publication date: 1 December 2003

Ong Hway‐Boon and Cheng Ming Yu

One of the most significant implications of technological advances in the banking sector is the possibility of delivering banking services through electronic channels…

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10016

Abstract

One of the most significant implications of technological advances in the banking sector is the possibility of delivering banking services through electronic channels (e‐channels). E‐channels provide alternatives for faster delivery of banking services to a wider scope of customers. Nowadays, e‐channels have gained increasing popularity in delivering banking services. However, prior to the implementation of e‐channels, several factors and investment costs must be identified to ensure a more cost effective and efficient execution of e‐channel services. A survey is thus conducted to determine factors that are essential for the successful implementation of e‐channels by domestic commercial banks in Malaysia. Data were collected from primary sources and were analysed via frequency analysis and factor analysis. The results of the survey suggested that banks’ operation management is the main factor affecting the success of ATMs, PC and branch banking, while product innovation and knowledge development factors are found to have the most significant effect on the success of banking kiosks and phone banking respectively.

Details

International Journal of Bank Marketing, vol. 21 no. 6/7
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 26 January 2010

Jamie Anderson

Mobile banking (M‐banking) involves the use of a mobile phone or another mobile device to undertake financial transactions linked to a client's account. M‐banking is one

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4312

Abstract

Purpose

Mobile banking (M‐banking) involves the use of a mobile phone or another mobile device to undertake financial transactions linked to a client's account. M‐banking is one of the newest approaches to the provision of financial services through information communication technology (ICT), made possible by the widespread adoption of mobile phones even in low income countries. Emerging mobile banking (m‐banking platforms) in developing markets enable two sided markets, bringing together mobile handset users with other mobile users and commercial partners. It is the argument of this paper that the emergence of m‐banking platforms has the potential for spill‐over effects, and that these spill‐over effects will require regulatory authorities to develop appropriate policy responses.

Design/methodology/approach

This article derives from research on the m‐banking strategies of mobile network operators (MNOs) in developing markets, and the regulatory responses to these strategies. Field visits were made to the Philippines and Kenya where m‐banking platforms are well established, and in depth interviews took place with companies that had succeeded in launching m‐banking platforms, or were considering strategic responses in markets where competitors had launched platforms. Companies were identified from the existing body of literature, observation and personal contact. Additionally, data were collected from developing case studies.

Findings

M‐banking has the potential to bring basic banking and electronic transactions services to unbanked consumers in developing markets. But in enabling two‐sided markets, m‐banking solutions also provide specific questions for telecommunications industry regulators. Regulators need to question if the elements are in place for m‐banking networks to tip towards a single platform, especially in markets with dominant operators that hold significant market share.

Practical implications

Because of the multi‐homing costs inherent in most existing m‐banking platforms, these platforms introduce both economic and psychological switching costs for consumers. In turn, these switching costs can have the impact of reinforcing existing network effects in markets where the incumbent already holds significant market share for voice traffic. There are a number of options available to telecommunications regulators in responding to the emergence of m‐banking platforms, and authorities should take a measured approach to achieve optimal societal and industry outcomes.

Originality/value

This paper fulfils an important void in the current literature related to the growth of m‐banking platforms in emerging markets. While there has been an increasing body of literature examining the potential socio‐economic impact of m‐banking in developing markets, the purpose of this paper is to explore the implications of m‐banking for competitive dynamics between competing firms, and the related issues for regulatory authorities.

Details

info, vol. 12 no. 1
Type: Research Article
ISSN: 1463-6697

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Article
Publication date: 1 February 1997

Gerald P. Dwyer

The available evidence is partly consistent and partly inconsistent with a negative association of branching restrictions and the number of banking offices. In this paper…

Abstract

The available evidence is partly consistent and partly inconsistent with a negative association of branching restrictions and the number of banking offices. In this paper, I present evidence that the failure to consistently find such a negative association of branching restrictions and banking offices is quite robust. I suggest that the endogeneity of the banking restrictions and regulators' unmodeled behavior are the basic source of the inconsistency. I conclude that there is no evidence that suggests substantial changes in the number of banking offices with the introduction of interstate branching.

Details

Managerial Finance, vol. 23 no. 2
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 1 April 1986

Charles W. Hultman

The International Banking Act (IBA) of 1978 sharply restricted the ability of foreign banks to establish offices in more than one state. Yet during the late 1970s and…

Abstract

The International Banking Act (IBA) of 1978 sharply restricted the ability of foreign banks to establish offices in more than one state. Yet during the late 1970s and early 1980s barriers to interstate banking with regard to US financial institutions were beginning to fall. The most important fact that contributed to foreign bank involvement in interstate commerce was the grandfather provision, which permitted multistate networks to remain in operation. New interstate banking has been curbed by restrictions on full‐service offices, but it has continued to develop through Edge‐Act Corporations, bank holding companies and the use of non‐bank banks. Interstate banking is likely to benefit the public and will probably continue to expand but at a slower rate and more in line with that of US banks.

Details

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

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Article
Publication date: 1 April 2001

George Gilligan

Most people in Western countries are more likely to associate the term underground banking with an automatic teller machine in a subway station, than with complex…

Abstract

Most people in Western countries are more likely to associate the term underground banking with an automatic teller machine in a subway station, than with complex infrastructures of financial remittance that may be utilised either to by‐pass completely conventional banking facilities and processes, or else to connect with those same conventional banking facilities and processes only at selected points, at selected times and selected places. However, the low public profile of underground banking is in contrast to the increasingly high priority that governments, financial regulators and law enforcement agencies are giving to efforts to counter the facilitative role that underground banking can play in the activities of money launderers, organised crime, terrorist groups and tax evaders. Underground banking systems are playing an increasingly important role in the burgeoning tide of laundered money that is projected by the International Monetary Fund (IMF) to be equivalent to 2–5 per cent of global GDP with organised crime groups estimated to be grossing more than US$1.5trn a year. However, there is significant variation regarding guesstimates of the scale of the activities of organised crime and money laundering in general. For example, Walker applies a ‘crime‐economic model’ upon data collated from international databases and his model estimates a global money laundering total of $2.85trn per year, with these flows heavily concentrated in North America and Europe. These types of disparity in assessment are inevitable until a great deal more data is generated regarding money laundering and other sectors of alternative and/or illegal economies. Walker stresses that his results are very much interim, but they suggest some interesting patterns. For example: of totals of money laundered globally, the USA was the origin of more than 46 per cent and the destination of more than 18 per cent; and on a matrix of attractiveness of jurisdictions to money launderers Luxembourg ranked first with a score of 686, followed by the USA (634) and Switzerland (617), with the traditional homes of underground banking systems such as Pakistan (Hawala system) and China (Fei Chien) ranking in the lowest category (0–9). The methodological problems of measurement are especially acute regarding underground banking systems due to their intrinsically low levels of public visibility. Indeed, many of the dilemmas associated with underground banking are reproduced in other issues of conventional banking, financial regulation, law enforcement and economic governance. It is these dilemmas that are the core focus of this paper.

Details

Journal of Financial Crime, vol. 9 no. 2
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 23 August 2018

Arezo Ahmadi Danyali

The purpose of this paper is to study the influential factors in changing customers’ behaviors from online banking to mobile banking based on Tiller and Tad model.

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1767

Abstract

Purpose

The purpose of this paper is to study the influential factors in changing customers’ behaviors from online banking to mobile banking based on Tiller and Tad model.

Design/methodology/approach

A quantitative method was used. This study is a practical research work by using 400 people, among whom 384 participants were selected based on simple random sampling.

Findings

The results indicated that the perceived advantage of using mobile banking, the influence of peer groups, source facilitator conditions as well as technology had the highest correlation. Among the influential components on attitude, the highest level belongs to perceived advantage of using mobile bank. Among the effective factors on behavioral control, source facilitator conditions and technology facilitator conditions had the highest correlation.

Research limitations/implications

It is suggested that the provided services be expanded via mobile banking and more customers be encouraged to use mobile banking services. For instance, the transaction of currency, stock, etc. via mobile banking is suggested. It is recommended that mobile banking software should be designed in a way that the process of mobile banking services is very easy for customers. Bank staff and employees should be trained to be active promoters of mobile banking services not only inside branch locations, but in other places and work environments as informers, messengers and models of using mobile banking.

Practical implications

It is recommended that bank managers should make use of the mass media such TV, billboard, radio, press, etc., in order to increase public awareness of mobile banking, and try to take effective steps in creating positive attitude in their customers on using mobile banking.

Social implications

Mobile banking has evolved as a wireless communication interface for producing value by customers in banking transactions. Todays, one of the substantially remarkable modern techniques in providing banking services is the provision of financial and banking services by using smart phones (mobiles). Although the life of using smart phones for banking and financial operations is not too long, significant advancements have been observed in this area within a short time, which could highly promise the extensive development of this modern electronic banking technique in future.

Originality/value

During the last decade, information technology has had tremendous impacts on banking industry through guiding and introducing new financial products with a specific delivering to its customers, enabling the banks to be able to provide distinguished products and special services to their customers safely and reliably. It is more than 200 years since banks have served their customers through their branch systems. However, with the emergence of various types of technology, the nature of providing financial services has greatly changed, with the increasing growth in electronic commerce.

Details

Journal of Organizational Change Management, vol. 31 no. 6
Type: Research Article
ISSN: 0953-4814

Keywords

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Article
Publication date: 1 January 2006

Edgardo Demaestri and Federico Guerrero

Aims to review the potential risks associated with the separation of banking regulation from the orbit of the central bank in Latin‐American and Caribbean countries (LAC).

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589

Abstract

Purpose

Aims to review the potential risks associated with the separation of banking regulation from the orbit of the central bank in Latin‐American and Caribbean countries (LAC).

Design/methodology/approach

Sets out information on the banking regulators in LAC and on the current degree of involvement of the central bank in banking regulation; the main monetary policy issues connected to the separation of banking regulation from the central bank; and the main banking regulation issues involved.

Findings

The separation of banking regulation from the central bank would not present any great danger to LAC currently. However, the need to conduct the move in accordance with best principles must be emphasized.

Originality/value

Given the fertile ground offered by the countries of LAC, this paper presents arguably the most comprehensive examination to date of this “hot potato”.

Details

Journal of Financial Regulation and Compliance, vol. 14 no. 1
Type: Research Article
ISSN: 1358-1988

Keywords

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