Abstract
The financial sector is undergoing extensive changes and challenges that affect the entire market and infrastructure of financial service providers. Technological development leads to increased digitalisation and allows new business models to emerge. With regard to the banking sector, it is evident that this sector is characterized by employees and associated services. However, due to changing conditions, a decline in personnel has been recorded for many years. This raises the question as to what extent—based on contrary assumptions of the principle agency theory and the expense preference hypothesis—personnel changes influence the operational success of banks. On this basis, six hypotheses were formulated and tested. The principal component analysis method was applied to prepare the data. Afterwards, the actual analysis was carried out using a mixed method approach. The results on the basis of the years 2013–2017 showed a negative personnel development, which contributed to the improvement of the operating results of banks. Hereby it becomes evident that the business model design of savings and cooperative banks is of secondary importance.
Highlights
Technological development is leading to ever stronger software and hardware performance
The results presented first illustrate the reduction of highly multicollinear variables performed by Principal Component Analysis (PCA)
The results show that variables 1_ and 2_ of each year explain almost 100% of the variability of the original three parameters, so the complexity of the dataset could be reduced by using a two-factor solution
Summary
Technological development is leading to ever stronger software and hardware performance. Banks have to adapt to new technologies, increased competition with new competitors, and ever stronger regulation (Vives 2019), as well as human behaviour that has become increasingly digital in recent years (Omarini 2019). More and more digital offerings are being implemented by traditional bank institutions and anchored as an integral part of their business models (Mohan 2015; Maiya 2017). In this process, transformation and operating costs can be saved through technological development It can be assumed that digitalisation has a fundamental influence on the positioning and management of a bank (Diener and Špacek 2020)
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