Economic Benefits, Enhanced Awareness, and Available Resources: What Factors Navigate Bank Readiness in Basel III Implementation

Abstract

To maintain sustainable development, business management strategy of modern banks these days cannot neglect international standards. Hence, the main aim of the current study is to explore the factors that influence the readiness of banks in implementation of Basel III requirements based on the context of the Vietnamese banking system. To achieve clear explanations, this research utilizes the data set of 211 questionnaires collected from senior and middle-level managers as well as other management personnel related to Basel III implementation at 20 Vietnamese commercial banks, and performs the PLS-SEM by applying Smart PLS 3 software. The analysis results indicate that both awareness and expected economic benefits have positive impacts on the readiness of banks to implement Basel III requirements. Meanwhile, the effect of available resources is negative but not statistically significant. It can be said that the study provides one of the first evidence to shed new light on the factors that impact the readiness of banks in complying with strict requirements of Basel III, at least in the Vietnamese context. Hence, the findings are expected to provide the helpful guidance for banking leaders and policy-makers in Vietnam, where the banking system is ongoing reform to meet the international standards.