Jordanian Banks Research Articles

Factors affecting intention to use e-banking in Jordan

PurposeDespite the wide availability of internet banking, levels of intention to use such facilities remain variable between countries. The purpose of this paper is to focus on e-banking in a country with low intention to use e-banking – Jordan – and to explain the slow uptake.Design/methodology/approachA quantitative method employing a cross-sectional survey was used as an appropriate way of meeting the research objectives. The survey was distributed to bank customers in Amman, Jordan, collecting a total of 328 completed questionnaires. SPSS and AMOS software were used, and multiple regression and artificial neural networks were applied to determine the relative impact and importance of e-banking predictors.FindingsThe statistical techniques revealed that several major factors, including perceived ease of use, perceived usefulness, security and reasonable price, stand out as the barriers to intention to use e-banking services in Jordan.Originality/valueThis study theorizes a series of implications on intention to use e-banking. It draws the attention of Jordanian banks to the full functionality of their e-banking systems, emphasizing positive safety features, which could contribute to changing negative customer perceptions. It also contributes to eliciting the theory of customer value among banks by focusing on how they should properly enhance their use of shared value. Moreover, it will present to managers how e-banking predictors can send meaningful and timely information to customers.

The Effect of Speed and Accuracy in Accounting Information Systems on Financial Statements Content in Jordanian Commercial Banks

Several studies have emphasized the importance of accounting information systems all over the world with different views. The aim of this study is to determine the effect of accuracy and speed of accounting information systems towards financial content among Jordanian commercial banks. A descriptive approach was employed to achieve the objectives of the study. Survey questionnaire was used to collect data from a selected sample of 13 banks. the sample was selected from top and middle Management levels as these levels represents the perfect group for making decision’s related to quality of financial reports and its Relationship with accounting information systems, 130 questioners were distributed with average 10 questioners for each bank and 126 questioners were got response. The results reveal that there is significant effect of accuracy and speed of accounting information systems in financial content among Jordanian commercial banks.

The impact of lean practices on operational performance in the Banking Sector: An Empirical Investigation

Banking is considered as the backbone of any country even due to the unfavourable condition like war and internal disputes banking sector in the Middle East is in operations. However, to make these operations sustainable, continuous improvement is essential. It has been proved in the literature that lean approaches enhance the performance for not only manufacturing sector but also service sectors. The aim of this study is to explore the potential benefits of lean approaches in the banking sector of Jordan. Three most effective approaches are total quality management (TQM), 5S services and kaizen have been adopted and applied. A questionnaire has been developed and distributed by convenience sampling in all banks of Jordan. A total of 232 responses have been considered and SPSS 23 has been used for data analysis. The results revealed that all three approaches positively and significantly enhance the operational performance of banking sector. This study will help the managers of banks to make their operations more efficient and productive. For further studies, there is need to test more approaches and especially qualitative investigation to more explore the lean concept.

High performance work practices, organizational performance and strategic thinking

PurposeDrawing on a number of strategic management theories, the purpose of this paper is to explore the relationship between strategic thinking (in other words, systems perspective, focused intent, intelligent opportunism, thinking in time and hypothesis-driven analysis) and organizational performance. It also investigates whether the notion and content of high performance work practices, as identified in developed countries, can be used to amplify the effects of strategic thinking within the banking industry in a developing country.Design/methodology/approachUtilizing cross-sectional data obtained from commercial banks in Jordan, this paper applied structural equation modeling (SEM) to examine the banking sector in a developing country. Data were collected through self-administered questionnaires.FindingsAccording to the results, focused intent, intelligent opportunism, thinking in time and hypothesis-driven analysis have positive impacts on organizational performance, except when considered from the systems perspective. Consequently, high performance work practices were found to only moderate the relationship between focused intent, intelligent opportunism, thinking in time and organizational performance.Originality/valueThe authors examined the impact of strategic thinking on the organizational performance through the moderation role of high performance work practices. The results of this paper extend the existing literature by providing evidence from Jordan, a developing country outside of the western world.

The Effect of Information Systems on Bank Performance: A comparative study between Islamic and Commercial Banks in Jordan

This study aims to explore and analyze the most important reasons for decision making within the banking sector of Jordan, which, although extremely important, is largely absent in business literature pertaining to Jordan. Essentially, the researcher poses two central questions: Does implementation of Information Systems (IS) impact on business performance, and is there any difference in this impact between the two main groups of banks in Jordan; Islamic and Commercial? Two further questions are also investigated; the extent to which banks are applying IS, and whether there are differences in business performance due to individual bank characteristics, such as extent of capital reserves, the number of years it has been operating and the type of bank. Quantitative methodology has been used to collect and analyze data, which is comprised of 583 questionnaires. Various forms of analysis were employed to examine the research assumptions; independent and one-sample t-test, multiple regression analysis and ANOVA. The study proposes the following conclusions: • IS is applied by banks in Jordan; however, there is variation in application of equipment and software, with Commercial Banks exhibiting positive implementation and Islamic Banks negative implementation. • The only significant positive effect of IS was on marketing performance. • The relationship does not differ when a comparison between two samples is progressed. • Economic performance of a bank is related to the sector (Commercial or Islamic) to which it belongs.

The Impact of Environmental Sensing Strategies on the Organizational Effectiveness: Evidence from Jordan

The purpose of study is to identifying the impact of environmental sensing strategies on the organizational effectiveness among Jordanian commercial banks. In order to achieve the study objective, a questionnaire was designed and distributed to 175-members study community from the managerial level (director, deputy director and head of department). The appropriate statistical methods were used to analyze the data.    
 
 The result of the study reveals that, the level of applying environmental sensing strategies in Jordanian commercial banks has reached a high level. The level of organizational effectiveness in Jordanian commercial banks, has also reached a high level. There is a statistically significant impact of environmental sensing strategies (flexibility strategy, containment strategy, and forecasting strategy) on the organizational effectiveness as a whole and on its dimensions, individually, (availability of information, stability).   
 
 The study reached a number of recommendations, the most important are: creating a system of incentives and rewards for the employees to motivate them to work and to demonstrate distinguished abilities to interpret and clarify the information in a way that serves the organization.

INFORMATION QUALITY AND THE ORGANIZATIONAL EFFECTIVENESS: THE MODERATING EFFECTS OF ORGANIZATIONAL CULTURE AMONG CONVENTIONAL AND ISLAMIC BANKS

Quality of information is a priceless asset for organization to possess as its assist in carrying out business plans and changes. These business changes usually support the management executive in decision makings. In view of that, this study examines the information quality in AIS and its effects on organizational performance among conventional and Islamic banks in Jordan. To achieve that, proportionate stratified random sampling is applied to the information system users of sixteen conventional and Islamic banks in Jordan. Total copies of 600 questionnaires were distributed and only 250 among the returned copies were valid, suggesting a valid response rate of 41.7%. The study adopts the partial least square (Smart PLS 3) method to enhance the data analysis and perform hypotheses testing. Findings clearly show that quality of information is the key for business growth as it indicates a positive effect on organizational performance. Further result shows that organizational culture improves and increases business performance when combined with information quality. For this reason, conventional and Islamic banks in Jordan should have well-developed AIS as it assists organizations to -attain higher performance. There is need for more development in management skills to fully exploit the AIS in order to realize a greater organizational performance. In other words, full implementation of AIS should be given more priority by the managements of these conventional and Islamic banks.

The Impact of Audit Committee Characteristics on the Creative Accounting Practices Reduction in Jordanian Commercial Banks

This study aimed at determining the impact of the characteristics of the Audit Committee (The effect of Activity of the Audit Committee, the size of the Audit Committee, and Independence of the Audit Committee) in reducing creative accounting practicesin Jordanian commercial banks.The study population is composed of all Jordanian banks listed on the Amman Stock Exchange (16), during the period from 2011 to 2017. The study sample is represented by all Jordanian commercial banks. The current study is based on panel data since the data combine one-time and cross-section data for a period of time. The data was composed of a set of indicators for 13 Jordanian commercial banks for the period from 2011 to 2017, and data have been collected from the banks' annual reports. The adoption of the study on the analysis of time-series data comes from the increase in degrees of freedom.
 
 The results of the hypothesis test indicate that there is a significant effect of Audit Committee characteristics on the reduction of creative accounting practices in Jordanian banks at a level of significance of 0.05 except for variable (size of the Audit Committee).

Supply chain integration, organizational performance and balanced scorecard: An empirical study of the banking sector in Jordan

This paper examines the impact of supply chain integration on organizational performance in Jordanian banking sector. Supply chain integration is divided into two categories: customer and internal integration. Organizational performance comprises of the following perspectives: customers, internal processes, organizational capacity and stewardship. The results demonstrate that supply chain integration is significantly related to organizational performance. Evidence of the improved organisational performance is also provided in the feedback from some of the surveyed banks. Internal integration impacts all four organizational performance dimensions; however, customer integration has impact only on customer perspective. The results suggest that improved customer involvement could help develop the banks' performance. Primary data was collected by using a questionnaire at Jordanian banks. The research model was tested using data from the sample (n=112) of nine banks in Jordan. The data was analysed by means of exploratory factor analysis. The results of the multiple regression analysis show that supply chain integration effects significantly organizational performance

Corporate Social Responsibility Effective Determinants of the Banking Sector in Jordan

This study aimed at exploring the effective determinants of the Corporate Social Responsibility (CSR) of the Banking sector in Jordan . The researcher has adopted the qualitative research approach proposed by Strauss and Corbin (1990, 1998) on a sample of (20) bank employees involved in the corporate social responsibility in the Jordanian banks. As the three fundamental components this methodology should consolidate; which are: theoretical sensitive coding, that is, making hypothetical strong thoughts from the data to clear up the phenomenon examined; theoretical sampling, that is, picking whom to meet or what to see next as demonstrated by the state of the condition of hypothesis generation, and that implies starting data analysis with the first interview, and writing down memos and early hypotheses; and furthermore, the need to differentiate phenomena and settings to make the hypothesis legitimate. The researcher concluded that it was the phrase of “ Bank Profits ” as a probable key category that led to the validation of the perceived hypothesis. Key words : Corporate Social Responsibility; Effective Determinants; Banking Sector; Jordan. DOI : 10.7176/RJFA/10-9-06 Publication date :May 31 st 2019

The Impact of External Shari'ah Auditing on the Efficiency of Jordanian Islamic Banks Performance

This study aimed to explore the impact of external Shari'ah auditing on the efficiency of Jordanian Islamic banks performance. This study has used SEM to analyze collected data from auditors and employees in Islamic banks in Jordan. This study has used a questionnaire to explore the perception of external Shari'ah audit of Islamic banks in Jordan, then the model estimated, after dropping the variables show good model fit indicators. this study examined the effect of Shari'ah audit through eight construct and found that, seven constructs significantly affect Islamic banks performance, i.e. planning, risk assessment, materiality assessment, sampling, internal controls-testing, evaluation of observations and Shari'ah non-compliances, using the work of relevant internal functions leads to better efficiency of performances in Islamic banks, except internal control-assessment. This study has practical and significance contribution for Islamic banks about of importance external Shari'ah auditing on its efficiency.

The Impact of Other Comprehensive Income Items on Financial Performance: Case of Jordanian Commercial Banks

This study aims to determine the effect of the independent variable other comprehensive income on the dependent variables represented by the financial performance of commercial banks. Researcher has studied the case of Jordanian Commercial Banks during the period 2012 to 2017. The study sample consists of 13 Jordanian commercial banks. The study independent variable was given by the quotient of other comprehensive income on net income. The ratios: financial performance by return on assets, and return on equity were the two dependent variables. Study hypotheses were tested by the simple regression equation and T- test. It was found that there was a statistically significant effect of other comprehensive income on the financial performance as measured by the return on assets and return on equity. This significance can be attributed to the increasing weight of other comprehensive income items which makes the value of other comprehensive income an indicator of profitability and efficiency of banks and means of maximizing their wealth. It is recommended that Amman Stock Exchange, Securities Commission and the Companies Control Department, to urge the companies listed on ASE to increase the awareness of companies’ management about the importance of other comprehensive income concept.

The effect of sustainability accounting disclosures on financial performance: an empirical study on the Jordanian banking sector

This study aims to examine the effect of sustainability accounting disclosure on the financial performance of banks operating in Jordan during the period of 2013–2017. The study focused on the effect of economic, environmental and social disclosures on financial performance. To achieve the study objective, the content analysis method was used. The dimensions of sustainability accounting disclosure were measured through indicators that have been developed for this purpose, which are in accordance with Global Reporting Initiative (GRI) (G4-2013). The study results revealed that there is a statistically significant effect of sustainability accounting disclosure on the financial performance. In addition, the study results revealed that the disclosure of the economic and social dimensions had a positive effect on return on equity (ROE). While the environmental dimension did not affect the return on equity (ROE). In addition, the results of the study revealed that the disclosure of sustainability dimensions (economic, social and environment) had a combined effect on the return on assets (ROA). This means that the banks operating in Jordan give more priority to the economic dimension disclosure, than to the social and environmental dimensions.In reviewing previous studies in the accounting literature, it has been found that there is a paucity of studies that examine the concept of sustainability accounting, especially in the Jordanian banking sector. Therefore, this study constitutes value to this field.

Total Rewards and Employee Retention in a Middle Eastern Context

This article examines the influence of total rewards—comprising extrinsic, intrinsic, and social rewards—on employee retention in Islamic banks in Jordan, with particular focus on the employee perspective. A questionnaire is used to collect data from the study sample, which consists of 500 employees working in various Islamic banks across Jordan. The study hypotheses are then tested using partial least squares (PLS) technique by applying structural equation models (SEMs). Results show that extrinsic, intrinsic, and social rewards are all important factors in achieving employee retention. Interestingly, social rewards were shown to have the highest level of influence on employee retention. This research is new in the Jordanian context; it offers a deeper understanding of some of the most important factors in retaining talent and thereby increasing organizational productivity and competitive advantage. It furthermore provides new insights into the relationship between total rewards and employee retention within the context of the Middle East, a combination previously uncharted.

Income diversification and bank performance: The Jordanian case

Purpose - The purpose of this paper is to examine Jordanian banks in terms of the impact of income diversification on their performance (profitability and net interest margin). Methodology - Based on the period 2009-2017 and all thirteen Jordanian commercial banks, the econometric models are estimated using the Seemingly Unrelated Regression (SUR). Bank performance is measured by return on assets and net interest margin. As far as banks’ income diversification is concerned, we use a myriad of measures including net commission income to total assets, proportion of bank credit to individuals, SME sector, corporate sector to total credit, and the real estate sector. Findings - Based on the statistical analyses, we conclude that that income diversification impacts bank profitability in a positive manner. However, this impact (positive) comes only at the expense of widening net interest margins. Conclusion - It is in the interest of the banking system in Jordan to promote financial inclusion at the national level. Indeed, this aspect is important to, not only the concerned individuals, but also to their (banks) performance. Moreover, with greater levels of financial inclusion, net interest margin might also narrow.

The Moderating role of Internal Control on the Relationship between Accounting Information System and Detection of Fraud: The Case of the Jordanian Banks

This study chiefly makes an attempt to look at the result of accounting information system (AIS) on detection of fraud, with the use of control as a moderator. the information gathered from 225 staff of Jordanian banks were analyzed with PLS 3, and therefore the results show the necessary role of control on the linkage between AIS and detection of fraud among the examined banks. AIS and detection of fraud are absolutely and considerably correlate. The outcomes obtained are a valuable addition to the literature concerning factors impacting detection of fraud in countries in geographical region as well as Jordan. This study conjointly brings further justification for the scrutiny of AIS and internal controls potency.

The Impact of Supply Chain Integration and Internal Control on Financial Performance in the Jordanian Banking Sector

The aim of this paper is to use a recently developed framework of supply chain integration (SCI) to examine the influence of a set of relationships between SCI and internal control on financial performance in the Jordanian banking sector. SCI consists of external integration and internal integration. External integration includes customer integration and supplier integration. This study utilizes survey data from 249 employees in the Jordanian banking sector and tests the research framework and hypotheses using exploratory factor analysis. The impact of supply chain internal and external integration and internal control significantly affected financial performance. The impact of the examined factors on financial performance is as follows, in decreasing order: internal integration, supplier integration, customer integration, and internal control. This study’s contribution to supply chain management is in its integration of SCI and internal control variables to propose a practical framework for the banks to use, and its development of a measurement tool for managers to determine the effects of internal and external integration and internal control on financial performance.

The Effect of Applying Hedge Accounting in Reducing Future Financial Risks in Jordanian Commercial Banks

The Effect of Applying Hedge Accounting in Reducing Future Financial Risks in Jordanian Commercial Banks
 
 The study aimed to identify the effect of applying hedge accounting on reducing the future financial risks of the Jordanian commercial banks by using financial ratios to find a practical method of calculating the hedge with its three categories and to address the future financial risks of commercial banks in Jordan.
 
 The researchers used both the descriptive and analytical methods based on the financial statements and reports of the Jordanian commercial banks for the period (2012-2017), in addition of using financial indicators. The study community included the published financial statements of the Jordanian commercial banks before applying hedge accounting and after in accordance with the amendments to IFRS Standard No. 9, as well as the banks listed in the Amman Exchange Market for the period of study. The sample of the study included all Jordanian commercial banks that disclosed the application of hedge accounting in their annual financial statements.
 
 The study concluded that there is a strong correlation between cash flow hedges and reducing the financial risks of Jordanian commercial banks after the application of hedge accounting for the period (2012-2017), and that there is a strong correlation between fair value hedges and reducing the financial risks.
 
 The fair value hedges have an explanatory capacity to reduce the financial risk by 27.4%. This has been derived from the R2 value. There is a weak correlation between the net investments in foreign currencies and the financial risks. The study recommended the importance of maintaining the use of hedge accounting to achieve fairness and honest representation in the final financial statements to the benefit of internal and external users.

The Effect of Mobile Banking Application on Customer Interaction in the Jordanian Banking Industry

<strong>Banks have changed from paper-based banking solutions provider to the latest of the technologies like mobile banking. Adoption of mobile-banking has received more attention in recent years, because there are more phones than computers in the market. But, like in any emerging technology, there exist barriers to the adoption of mobile banking services. This study will attempt to technically address these largely unfounded factors while helping to lay a roadmap for proper implementation of mobile banking technology in the Jordanian banking industry. The study found that Supportive Access factor of mobile banking is associated with the user satisfaction related to mobile banking. </strong>

The Service Quality Dimensions that Affect Customer Satisfaction in the Jordanian Banking Sector

Banks must meet the needs of their customers in order to achieve sustainable development. The aim of this paper is to examine service quality dimensions, by using the modified SERVQUAL model, which can be used to measure customer satisfaction, and the effect of these dimensions (tangibles, responsiveness, empathy, assurance, reliability, access, financial aspect, and employee competences) on customer satisfaction in Jordanian banks. Data were gathered from 825 customers in the Jordanian banking sector. The sample data were statistically analyzed through exploratory factor analysis by the SPSS program to determine service quality perception and customer satisfaction. The results illustrate that the modified SERVQUAL Model extracted four subscales in the new model instead of eight in the initial model. The first subscale contains four dimensions—assurance, reliability, access and employee competences. The second subscale consists of two dimensions—responsiveness and empathy. The third and fourth subscales—financial aspect and tangibility—are separate factors. Further studies should consider the dimensions of access, financial aspect, and employee competences as essential parts of service quality dimensions with the other subscales, so as to improve wider customer satisfaction in the banking sector. In the authors’ opinion, the modified SERVQUAL model is useful for addressing customer satisfaction in the banking sector.