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Article
Publication date: 24 August 2022

Jagdish N. Sheth, Varsha Jain, Gourav Roy and Amrita Chakraborty

Artificial intelligence (AI) is used by banking services primarily to automate systems; however, this ecosystem does not work in emerging markets because human intervention is…

4264

Abstract

Purpose

Artificial intelligence (AI) is used by banking services primarily to automate systems; however, this ecosystem does not work in emerging markets because human intervention is needed, and there are concerns related to infrastructure. There is plenty of research on AI-mediated banking services, but the existing discussions are cumbersome, and studies on AI's service features in banking for emerging markets are limited. Furthermore, the ongoing discussions are centred on developed markets where automation in banking services is noteworthy and accepted. Through this paper, the authors emphasise the relevance of AI mediation in emerging markets and the possible role of strategising AI in banking services for personalised experiences.

Design/methodology/approach

The authors' article followed an exploratory, inductive approach through in-depth interviews and thematic analysis. In total, 36 financial experts were interviewed, and the relevant perspectives were analysed to develop the research process and framework for a personalised banking experience.

Findings

The authors' paper introduced five key themes and presented those themes accordingly. The first theme details the importance of AI-mediated banking and the skills necessary for operational capacity. The second theme is on the relevance of AI-mediated banking awareness amongst users. The third is about channelling the importance of AI-driven interfaces through managers and employees. Fourth, the authors emphasised the relevance of human intervention due to users' demographic patterns. The fifth theme led to a discussion on personalised AI-mediated banking services.

Research limitations/implications

The authors recommend that managers understand the relevance of quality service amongst users. The authors' paper discusses the relevance of AI and human intervention in banking services; however, the process for seamless, personalised banking experiences is not provided. Thus, this paper encourages managers to build a banking ecosystem that delivers a seamless banking experience through AI.

Originality/value

The authors' paper highlights the importance of human intervention in AI-driven banking by introducing personalised service experience elements and highlighting the role of customer experience in AI-driven banking services in emerging markets.

Details

International Journal of Bank Marketing, vol. 40 no. 6
Type: Research Article
ISSN: 0265-2323

Keywords

Book part
Publication date: 29 December 2016

Hanh Thi My Phan and Kevin Daly

This study aims to investigate both market concentration and bank competition of banking across six emerging Asian countries (e.g., Bangladesh, Indonesia, India, Philippines…

Abstract

This study aims to investigate both market concentration and bank competition of banking across six emerging Asian countries (e.g., Bangladesh, Indonesia, India, Philippines, Malaysia, and Vietnam) over pre and post the 2008 global financial crisis. The conduct parameter approach following the framework suggested by Uchida and Tsutsui (2005) is used to estimate bank competition in these countries. The study employs both seemingly unrelated regression (SUR) and three-stage least squares (3SLS) to estimate simultaneously the system of equations in our model. Generally we find a negative association between market concentration and bank competition across most of the countries in the study suggesting that banks in concentrated markets collude to generate higher profits. Monopolistic competition was the best description of competitive structure of banking across the majority of countries investigated by this study. The study fills the gap in the banking literature by investigating bank competition, concentration, and their relationship across emerging Asian economies over the 2008 global financial crisis. Moreover, several policy implications for banking industry are suggested.

Details

Risk Management in Emerging Markets
Type: Book
ISBN: 978-1-78635-451-8

Keywords

Book part
Publication date: 8 November 2010

Aneta Hryckiewicz and Oskar Kowalewski

In recent years, foreign banks have significantly expanded their presence in many emerging countries. In our study, we use panel data to examine the economic determinants of…

Abstract

In recent years, foreign banks have significantly expanded their presence in many emerging countries. In our study, we use panel data to examine the economic determinants of foreign banks’ entry modes into emerging European countries during the period from 1994 to 2008. Our results suggest that a parent bank's choice of an organizational structure is a function of its strategic plans in the region and the countries’ characteristics. After further consideration of the financial crisis of 2007–2010, we find that as a result, parent banks tend to behave differently toward their foreign affiliates depending on its organizational structure. Our findings suggest that these differences are especially observable during periods of economic expansion and home financial distress.

Details

International Banking in the New Era: Post-Crisis Challenges and Opportunities
Type: Book
ISBN: 978-1-84950-913-8

Article
Publication date: 19 September 2016

Farzin Abadi, A.N. Bany-Ariffin, Ryszard Kokoszczynski and W.N.W. Azman-Saini

The purpose of this paper is to explore the impact of banking concentration on firm leverage in 21 major emerging countries from different geographical regions, controlling for…

1103

Abstract

Purpose

The purpose of this paper is to explore the impact of banking concentration on firm leverage in 21 major emerging countries from different geographical regions, controlling for firm determinant and macroeconomic determinant of firm leverage.

Design/methodology/approach

This study is based on a relatively large sample of 5,779 enterprises with total 48,280 numbers of observations over the period from 2006 to 2013 and the regression model is performed by applying two-step system general method of moment estimator methodology.

Findings

This study finds a positive and significant relationship between banking concentration and firm leverage. Therefore, the overall results follow the information-based theory which indicates lower firms financing obstacles as banks are more concentrated.

Research limitations/implications

Bank-level data of all the countries to measure banking concentration is until 2013, which restrict the empirical analysis until 2013. Also, the study conducts the analysis.

Practical implications

The study enables policymakers, society, and academics to have better understanding on the beneficial effects of alternative banking market structure on firms’ access to credit and therefore, in determining the level of firm leverage in emerging countries.

Originality/value

The study represents one of the limited available empirical researches to examine the beneficial effect of alternative banking market structures of firm leverage in emerging countries.

Details

International Journal of Emerging Markets, vol. 11 no. 4
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 6 November 2017

Vighneswara Swamy

This paper aims to assess the topography of financial regulation, supervisory styles and performance of banking systems across the world.

Abstract

Purpose

This paper aims to assess the topography of financial regulation, supervisory styles and performance of banking systems across the world.

Design/methodology/approach

The author gains insights by comparing regulatory and supervisory practices and their impact on banking system performance before and after the global crisis. The study illustrates the differences in regulation/supervision among crisis, non-crisis and BRICS countries. Even as capital ratios increased, bank governance and supervision regimes were strengthened, the private sector incentives to monitor banks deteriorated.

Findings

The results show that the crisis-countries had weaker regulatory and supervisory frameworks than those in emerging countries during the crisis period. BRICS countries as a distinct block have demonstrated uniqueness in their regulatory/supervisory styles that are similar neither to those in the crisis-countries nor to those in the non-crisis countries.

Originality/value

The originality of this study lies in its unique approach to assessing the bank regulation and supervision styles around the world and their impact on banking system profitability, as it uses a robust database. Further, this study provides not only a general assessment but also a comparative analysis of the BRICS and emerging economies. Regulatory agencies around the world would greatly benefit from systematic evidence on the relationship between bank performance and regulatory/supervisory systems.

Details

Journal of Financial Economic Policy, vol. 9 no. 4
Type: Research Article
ISSN: 1757-6385

Keywords

Book part
Publication date: 11 August 2016

Mohamed Rochdi Keffala

The major objective of this study is to inspect the differences in the effect of derivatives on the stability between banks from emerging countries and those from recently…

Abstract

The major objective of this study is to inspect the differences in the effect of derivatives on the stability between banks from emerging countries and those from recently developed countries.

According to the repercussions of the recent financial crisis, we divide the whole period into normal period “the pre-crisis period,” 2003–2006, and turbulent period “the crisis & post-crisis period,” 2007–2011. We use the Generalized Methods of Moments (GMM) estimator technique developed by Blundell and Bond (1998) to estimate our regressions.

Our main conclusions show that, in general, using derivatives by banks from emerging countries deteriorates their stability especially during the turbulent period, whereas, using derivatives do not weaken the stability of banks from recently developed countries. We deduce that banks from emerging countries are more destabilized by using derivatives than banks from recently developed countries.

Details

The Spread of Financial Sophistication through Emerging Markets Worldwide
Type: Book
ISBN: 978-1-78635-155-5

Keywords

Book part
Publication date: 29 December 2016

Mahfod Aldoseri and Andrew C. Worthington

The purpose of this chapter is to review the risks Islamic financial institutions face in an emerging market context, including risk sharing in Islamic financing and Shari’ah…

Abstract

The purpose of this chapter is to review the risks Islamic financial institutions face in an emerging market context, including risk sharing in Islamic financing and Shari’ah (Islamic law) compliance risk. We explore current risk management practices and establish the link between risk management and the financial performance of banks and the efficiency and effectiveness of financial sectors in emerging markets. Because of their distinctive risk profile, Islamic finance institutions face challenges in risk management. We show that Islamic banking is riskier in emerging markets because of the presence of immature money markets, limitations in the availability of lender of last resort facilities, and deficiencies in market infrastructure. There is also no evidence that Islamic banks have developed effective solutions for managing the risks conventional banks face as well as their own unique risks. We suggest that the countries that do this best are those that prioritize the structure of risk management knowledge and capabilities in a single financial regulator.

Article
Publication date: 28 April 2014

Aidan O’Connor, Francisco J. Santos-Arteaga and Madjid Tavana

The purpose of this paper is to propose a game-theoretical model for commercial bank foreign direct investment strategy, government policy and domestic banking industry…

1204

Abstract

Purpose

The purpose of this paper is to propose a game-theoretical model for commercial bank foreign direct investment strategy, government policy and domestic banking industry interactions in emerging market economies and demonstrate the application of this strategy to the banking system. Government policy and domestic banking industry interactions in emerging market economies and demonstrate the application of this strategy to the banking system.

Design/methodology/approach

The paper develops a game-theoretical model to analyze the optimality of the limiting entry strategy followed by a given domestic institutional sector when considering the entry applications of foreign banks in the domestic financial system. The model analyzes the strategic options available to an emerging market country with a relatively underdeveloped banking system when deciding whether or not and to what extent allow for the entrance of better reputed and more technologically advanced foreign banks in its domestic financial system.

Findings

The paper shows that the progressive liberalization of entry restrictions would define the perfect Bayesian equilibria of the subsequent set of continuation games and the respective payoffs derived from this liberalization as the domestic economy integrates and competes within the global financial system.

Originality/value

Banks operating in the international financial market have incentives to invest directly in emerging market economies and governments have incentives in allowing foreign banks entry to their market. As banking systems in these economies are generally underdeveloped, opening the financial system to foreign competitors could lead to a decrease in the market share of local banks. Eventually foreign banks could control the banking system and could de facto control the money supply.

Details

International Journal of Bank Marketing, vol. 32 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 10 May 2022

Akinyemi Paul Omoge, Prachi Gala and Alisha Horky

As disruptive technologies, such as the use of artificial intelligence (AI)-enabled customer relationship management (CRM) systems, alter the processes and strategies that banks

4093

Abstract

Purpose

As disruptive technologies, such as the use of artificial intelligence (AI)-enabled customer relationship management (CRM) systems, alter the processes and strategies that banks use in service delivery models, the impact of such technologies on consumer acceptance and buying behavior must continue to be examined. This research studies the impact of technology usage and acceptance of AI-enabled banking CRM systems in Nigeria on consumer buying behavior via the mediation of customer satisfaction and service quality. The study also investigates the negative impact of technology downtime, a frequent phenomenon in the emerging market, which has not, to this point, been studied on a large scale.

Design/methodology/approach

The authors collect quantitative data via a face-to-face administered questionnaire from four hundred customers of ten different Nigerian banks regarding their perceptions of technology use in the banking sector.

Findings

While the research finds that technology usage has positive and direct effects on service quality, customer satisfaction and consumer buying behavior, service quality was found not to have a significant effect on consumer buying behavior. The study also establishes that technology downtime has a moderating effect on technology usage, consumer buying behavior and customer satisfaction in the banking context.

Originality/value

Scant literature exists that explores the importance of culture in technology usage and acceptance, specifically in developing countries like Nigeria. This study explores the impact of technology usage along with acceptance in the Nigerian setting on Nigerian consumers and their resulting satisfaction. Technology usage has been known to impact customer satisfaction in various ways, but no study has looked specifically at how technology in the banking sector can further be of help or harm from a Nigerian perspective. This study explores the technology usage in banking sector of Nigeria and its impact on the consumer buying behaviour. No studies in our knowledge have been known to consider the role of technology downtime, a frequent phenomenon in emerging market, as a factor, which will affect the customer satisfaction and buying behavior. Thus, this study (1a) explores the negative outcomes of technology downtime on both service quality and customer satisfaction, (b) explores the moderating relationship of technology downtime on the technology usage and consumer-related outcomes.

Details

International Journal of Bank Marketing, vol. 40 no. 6
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 2 March 2023

Van Dan Dang and Japan Huynh

The paper analyzes the impact of bank opacity on financial stability in an emerging economy.

Abstract

Purpose

The paper analyzes the impact of bank opacity on financial stability in an emerging economy.

Design/methodology/approach

Based on a unique dataset of 31 Vietnamese commercial banks from 2007 to 2019, the paper captures earnings opacity via discretionary loan loss provisions and reflects individual bank stability through the accounting-based Z-score index and its disaggregate components. The least squares dummy variable corrected (LSDVC) approach is employed for empirical analysis.

Findings

In contradiction to most studies on developed economies, earnings management improves bank financial stability in Vietnam. Earnings management is more important for the financial stability of smaller banks. Further, the effect of financial information disclosure on bank stability is strengthened by unfavorable macroeconomic conditions, particularly economic downturns, the global financial crisis and uncertain times in banking.

Originality/value

This is the first study to shed light on how bank opacity influences bank financial stability in an emerging market. The evidence with the conditioning roles of bank size and macroeconomic factors, such as uncertainty in banking, is entirely novel in the related literature. Additionally, the paper contributes to a growing body of banking literature by using the LSDVC estimator to examine the association between bank opacity and bank stability.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

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