Exploring the Main Effect of e-Banking on the Banking Industry Concentration Degree on Predicting the Future of the Banking Industry: A Case Study

Zohreh Ghasemi,Mozhdeh Afshar Kermani,Tofigh Allahviranloo,Bekir Sahin

doi:10.1155/2021/8856990

Zohreh Ghasemi, Mozhdeh Afshar Kermani + Show 2 more

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https://doi.org/10.1155/2021/8856990

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Abstract

Today, regarding the rapid growth of Information and Communications Technology (ICT), e-commerce, and the subsequent expansion of electronic banking, the banking market structure is also expected to dramatically be changed. This paper aims to explore the main effect of electronic banking on the structure of the Iranian banking industry by investigating the banking market concentration degree. To accomplish this aim, an intelligent hybrid model is developed based on multilayer perceptron neural network and fuzzy regression of the effects of banking on the relative electronic share of banks. In the developed method, the neural network parameters such as weights and errors have been considered as the fuzzy parameters to model it under uncertainty. Ultimately, the descriptive statistics are utilized to evaluate how the difference in relative size of banks concerning e-banking has changed, in addition to exploring the main effect of e-banking on the bank’s contribution described as a neural network-fuzzy regression model. Moreover, it shows how the concentration degree in the Iranian banking sector has been reduced. The implemented analysis of the reasons for this decrease reveals that the share of banks has decreased due to an increase in the share of the small banks. Furthermore, model estimation confirms that there exists a positive relationship between banks’ share and the use of electronic banking. Besides, the small banks have strongly been shown to utilize the e-banking so that it would lead to an increase in their share and a decrease in the concentration degree. As such, it can be concluded that e-banking has reduced the concentration degree in Iran. The descriptive statistics are employed to prove it.

Highlights

Both economics and industrial organization are the important trends in economics that assess the behavior interaction between producers with each other, producers with customers, and customers with each other
Utilizing the hybrid models or combining different models is a common approach to improve the accuracy of the predictions. e literature on combinatorial models is very extensive, in which many studies have been carried out since the first research in this field [10,11,12]. e basic idea of combining multiple models into predictions is to utilize every single model to different patterns in the data. e experimental and theoretical findings indicate that combining different models is an effective and efficient approach to enhance the accuracy of the predictions [13]. e predictive studies have provided several hybrid models using artificial neural network (ANN) [14]
To expand the effect of e-banking on the concentration degree of the Iranian banking sector, or in other words, to assess how the relative size of banks changes with respect to electronic banking, in addition to examining the impact of electronic banking on banks’ contribution as a hybrid model of neural network-fuzzy regression, the descriptive statistics are employed. is is carried out using Excel software

Summary

Introduction

Both economics and industrial organization are the important trends in economics that assess the behavior interaction between producers with each other, producers with customers, and customers with each other Studying some features such as behavior, structure, and performance of markets is a critical issue of industrial economics, and how these features are related to each other, their causality, and the factors affecting these features have been the subject of several studies in the field of economics. The concentration degree is known as a structural variable that is one of the critical factors affecting the market share of industries, which may have a significant impact on the intensity of banking market competition. If the β􏽥1 center is negative and significant, it denotes that e-banking has eliminated more deposits and reduced its share of the bank, based on which there may be a dual effect of supply and demand on network effects. is has a negative impact on the bank’s share, which may reduce the consumer impact through adverse consumer information. erefore, if the relationship between market share and e-banking is positive, it indicates a network effect; but if this relationship is negative, no definitive conclusion can be stated about its cause.

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