Banking Operations Research Articles

An Empirical Analysis of Green Finance's Impact on Commercial Banks' Operational Performance

With the financial industry in various countries under strict regulation and interest rates increasingly market-oriented, the rise of the green finance sector has significantly impacted the operations of commercial banks. This influence is particularly evident in green credit, bonds, and insurance, which have emerged as critical components of sustainable finance. As a novel financial paradigm, green finance presents vast development prospects by linking economic growth with environmental sustainability. By actively developing green financial products and services, commercial banks can enhance their operational performance and create new profit growth opportunities. This study conducts an empirical analysis using data from state-owned, joint-stock, and city commercial banks to evaluate the relationship between green finance and bank performance. The findings reveal that green finance positively impacts the operational performance of commercial banks. Notably, green credit emerges as a significant driver, improving profitability while addressing environmental challenges. However, the study also identifies several challenges, such as the need for strategic alignment, product innovation, and enhanced risk management. Commercial banks must improve strategic planning, foster innovation, and strengthen their competitiveness to sustain momentum while maintaining a strong sense of social responsibility. These efforts will contribute to advancing green finance and enable banks to play a pivotal role in promoting sustainable economic development. This research provides valuable insights for policymakers and financial institutions aiming to align economic objectives with environmental goals.

Analysis of the Current Situation of Liquidity Risk Management in China's Commercial Banks and the Proposed Countermeasures

This paper discusses in depth the importance of liquidity risk management in commercial banks and the challenges it faces at a time of accelerated global economic integration. Financial globalization not only brings unprecedented development opportunities for the banking industry, but also exposes it to more complex and volatile liquidity risks. As an important part of the financial system, the sound operation of commercial banks is crucial for maintaining financial stability and healthy economic development. The article focuses on the current situation of liquidity risk management in Chinese commercial banks and reveals the core issues of weakening deposit base and loan expansion aggravating liquidity pressure through detailed analysis. Subsequently, a combination of literature review and case studies is used to analyze the dual impact of macroeconomic fluctuations and micro-management deficiencies on liquidity risk. Ultimately, the study concludes by emphasizing the key roles of the improvement of the government regulatory system and fintech in optimizing the asset and liability structure of banks and enhancing the efficacy of risk management, which together safeguard the sound operation of the financial system and the sustained and healthy development of the economy.

Banking Transformation in the Digital Era: Bank Cooperation with Financial Technology and the Role of the Financial Services Authority in Digital Bank Supervision

The Industrial Revolution 4.0 has brought significant transformations to various aspects of life, including financial activities, which have increasingly transitioned into digital systems facilitated by financial technology (fintech). Fintech accommodates remote financial activities, reshaping the banking industry through the emergence of digital banks that enhance customer convenience in accessing banking services. This development reflects the growing cooperation between banking institutions and fintech companies. However, digital-based financial activities are inherently susceptible to system vulnerabilities, potentially causing customer losses. This study explores two main issues: (1) the nature of cooperation between banks and fintech and (2) the role of the Financial Services Authority (OJK) in supervising digital banking operations. The findings reveal that collaboration between banking and fintech is achieved by integrating banking services with fintech platforms, enabling seamless customer access. The OJK employs direct (on-site) and indirect (off-site) supervision methods to ensure regulatory compliance and mitigate risks. Additionally, the OJK leverages advanced technologies such as the OSIDA (OJK Suptech Integrated Data Analytics) system to optimize supervision and implement a regulatory sandbox framework to foster innovation while maintaining oversight.

PENGARUH GREEN BANKING TERHADAP PROFITABILITASBANK BUMN DI INDONESIA PERIODE 2019-2023

The implementation of green banking is one of several factors that can have an impact on banking profitability. In addition to being a form of responsibility and participation of banks in protecting the environment, in fact the implementation of green banking has a fairly large influence on profitability. This study aims to understand the impact of green banking policies and daily operations on the profitability of state-owned banks in Indonesia in 2019-2023. Green banking policies are measured by 16 indicators set by Shaumya & Arulrajah (2016) and daily green banking operations are measured through the frequency of transactions via mobile banking, both of which are independent variables. Meanwhile, the dependent variable is profitability which is measured by the Return on Assets (ROA) ratio. To understand the influence between variables using panel data regression analysis. The results reveal that; 1) partially the impact of green banking policies on the profitability of state-owned banks is positive and insignificant; 2) partially the impact of daily green banking operations on the profitability of state-owned banks is positive and insignificant; 3) simultaneously the impact of green banking policies and daily operations on the profitability of state-owned banks is positive and significant

The Impact of Situational Leadership on the Effectiveness of Crisis Management: A Field Study at Banks Operating in the Republic of Yemen

The Impact of Situational Leadership on the Effectiveness of Crisis Management: A Field Study at Banks Operating in the Republic of Yemen

Managing and resourcing Nigerian banks’ diasporic operations in the UK: An empirical study

This study explores the objectives and operations of the diasporic operations of Nigerian banks in the UK. Its aim is to understand why such banks choose to establish a presence in the UK, how they structure themselves, and how they meet the UK’s regulatory standards. By employing a mixed-method approach – a combination of survey data and semi-structured interviews – this research examines the reasons underlying Nigerian banks’ engagement in diaspora banking, their human resources strategies, and the manifestation of their organisational culture within the UK context. The findings illustrate that Nigerian banks utilise either the subsidiary model or the branch model to cater to the financial needs of Nigerian diaspora communities, facilitate international transactions, and support international investment in Nigeria and Africa more broadly. The usually staffing strategy applied involves a mixture of UK-based employees and Nigerian staff seconded from the banks; headquarters in Nigeria, which ensures that the bank are able to adhere to both UK financial regulations and Nigerian compliance standards. The study’s originality lies in its novel contribution to the operational activities of diaspora banking in the UK.

Factors That Influence Cybersecurity Compliance Behaviours by Bank Employees: A Case of Banks Operating In Kenya

Digitization of transactions in Banks has developed exponentially since the advent of the internet technology. This has brought about efficiency and high quality service delivery at all times. However, cyber threats also continue to grow exponentially in spite of various initiatives to counter the threats. There are numerous technology initiatives to address the issue of cyber threats but the problem still persists. There is very limited research on how to leverage on human behaviours to effectively improve Cyber security compliance behaviours in Banks. Investigating Cyber security Compliance behaviours in Banks has therefore become inevitable. The main purpose of this study was to determine the factors that influence cyber security compliance behaviours in banks operating in Kenya. This was accomplished using a model that was based on an integration of three theories: Institutional Theory, the Protection Motivational Theory (PMT) and the General Deterrence Theory (GDT). In order to empirically test the relationships between the independent and dependent variables, data were collected from 75 purposively selected bank employees in Kenya. The Research was carried out using the mixed (both quantitative and qualitative) approach and survey tools used to collect data were verified for reliability and validity before being used. Data analysis was carried out using SPSS Version 25.0, MS Excel 2013, and WarpPLS (SEM) Version 7.0. The findings of our study indicate that the direct paths from the independent variables “Normative pressure” (p = 0.026, β = 0.213), “Self-Efficacy” (p < 0.001, β = 0.440), “Punishment certainty” (p = 0.024, β = 0.217), “Age” (p = 0.013, β = 0.243), “Prior experience with computers” (p = 0.004, β = -0.284) were found to have a positive, direct and significant influence on a bank employee cyber security compliance behaviours. “Top management commitment” was found to partially mediate between self-efficacy and Cyber security compliance behaviours. Bank management may find the results useful for future policy formulation in relation to cyber-security compliance behaviours. Researchers and scholars may also find the results useful in terms of contribution to the body of knowledge and further investigation to fill the gaps identified by the study.

Enhancing cybersecurity in Moroccan banking: A strategic integration of AI, blockchain, and business intelligence

The rapid digitization of the banking sector in Morocco has significantly transformed financial services, enhancing accessibility and convenience for customers. However, this shift has also introduced substantial cybersecurity challenges, as financial transactions and sensitive data increasingly migrate online. This paper examines the critical cybersecurity threats facing Moroccan banks, including data breaches, identity theft, and fraud, while highlighting the inadequacies of traditional security measures in addressing these modern threats. To combat these challenges, we propose an integrated cybersecurity strategy that leverages Artificial Intelligence (AI), Blockchain technology, and Business Intelligence (BI). This approach aims to enhance real-time threat detection, secure transactions, and optimize decision-making through data-driven insights. By adopting this comprehensive framework, Moroccan banks can strengthen their cybersecurity posture, protect customer data, and foster trust in an increasingly digitalized financial ecosystem. The paper concludes with a discussion of the implementation strategies necessary for successfully integrating these technologies into banking operations, emphasizing the importance of collaboration, innovation, and adaptability in navigating the evolving cybersecurity landscape.

ARTIFICIAL INTELLIGENCE IMPLICATIONS IN ISLAMIC BANKS: POTENTIAL AND CHALLENGES

As new digitalization strategies storm the banking industry, banks which are behind the technological curve may struggle to keep pace. This is a well-known challenge in the Islamic banking sector in particular; however, this research shows that little is being done to achieve unified digitalization in operations. Artificial Intelligence (AI) is a disruptive force in the financial sector, promising increased financial inclusion, economic development, and a excess of efficient, transparent, Shariah-compliant financial solutions due to its integration of technology with Islam’s profound ethical principles. The objective of this paper is to study the potential and challenges of AI implications in Islamic Banks. This is a qualitative study using focus group interviews with five Islamic Banking experts consists of Shariah Committee Member, academic experts and Islamic banking executive from different banks in Malaysia. SC members from different Islamic banks. Following the interviews, a thematic analysis of the transcribed data was conducted using computer-assisted qualitative data analysis software. The participants were generally receptive towards the utilization of AI tools in the Islamic banks which give a significant impact of the Islamic banking landscape. The participants recognize the potential of AI for improving the efficiency and effectiveness of the Islamic banking operations. However, they raised some concerns about the challenges that need to be addressed such as replacing of manpower with AI in some area in Islamic banks. The novelty of this research provides a novel discussion of potential and challenges of AI implications in Islamic banks and at the same time add to the Islamic banking literature in this area. The size of the focus group was limited to five participants to optimize group size and composition to allow adequate participation by each group member. Further sampling from more SC members and experts may elicit additional findings. The first-hand views from the focus group interviews provides valuable input for potential and challenges of adopting AI in the Islamic banking operations.

Implementation of Funding Risk Management in Sharia Banking

Activities in the banking world are very susceptible to risk. Especially in fundraising activities because it is closely related to the bank's operations itself. To minimize risk, risk management is needed. This purpose of this paper to determine the implementation of funding risk management at BSI KCP Kediri Hayam Wuruk. The research method used is qualitative research using field observations to collect relevant data and analyze it comprehensively. Data collection was carried out through interviews with funding officer Bank BSI KCP Kediri Hayam Wuruk, and literature studies taken from literature sources relevant to the topic. The research results show that there are 3 funding risk management, namely liquidity risk, reputation risk and return risk. The ways to manage these risks are, 1. Liquidity risk by identifying funding and asset structures, 2. Reputation risk by improving service and managing customer complaints in a timely manner and complying with regulations according to sharia principles, 3. Return risk by managing customer expectations and improving the best service to customers.

Regulating Artificial Intelligence to Advance Financial Inclusion in South Africa

The emergency of Artificial Intelligence (AI) endowed with capabilities to simulate human intelligence through software-coded operations, has become a topical issue perplexing the minds of regulators, government officials, non-governmental organisations, and the public, across the globe. Linked to this increasing AI debate, is the view that these technologies have the potential to facilitate financial inclusion. Whilst there are concomitant liability and cyber-security related issues associated with AI adoption, the importance of AI in facilitating financial inclusion cannot be overstated. AI can facilitate financial inclusion by enhancing the quality of financial services products and services offered by key players in the South African financial sector, including the capacity to improve the process of opening bank accounts, data analysis, assessment of credit scores, and the management of risk-linked to various financial products. Drawing significant lessons from a select study of the EU and UK model on the regulation of AI, this article argues that there is a need for South Africa to develop an effective regulatory framework governing AI in pursuit of advancing the goals of financial inclusion, among other things. In finality, the article offers pertinent recommendations in search of avenues for developing policies, principles, norms, and rules that govern AI in South Africa to advance financial inclusion and other important related goals.

THE INFLUENCE OF INNOVATION AND FINANCIAL TECHNOLOGY ON BUSINESS SUSTAINABILITY: BUSINESS STRATEGY AS A MODERATOR

THE INFLUENCE OF INNOVATION AND FINANCIAL TECHNOLOGY ON BUSINESS SUSTAINABILITY: BUSINESS STRATEGY AS A MODERATOR

Central bank balance sheets under foreign exchange accumulation: insights from endogenous money theory and monetary policy implementation

Abstract This article proposes to draw on the recent experiences of many central banks of advanced economies and the evolution of their operational frameworks in the new context of increased domestic liquidity when analyzing the operations of central banks that engage in exchange rate management and increase their official foreign reserves as a result. It argues that the theoretical literature on endogenous money set within the context of an open economy with an exchange rate objective needs to be amended to account for such developments, as it would be entirely possible for a central bank that accumulates substantial foreign reserves to adopt a floor system and thus maintain a near-perfect control over its policy interest rate without the need for any compensating measure. On the grounds of the reverse causation argument, establishing a direct link between the foreign reserves and the monetary base should not entail any quantitative effect on other economic variables.

Próba oceny wpływu papierów wartościowych na stabilne i bezpieczne funkcjonowanie banków spółdzielczych w Polsce

Over the past 10 years, cooperative banks in Poland have significantly increased their share and changed the structure of financial instruments in their portfolio. Asset structure is key to both performance and risk resilience. There can be various reasons for increasing the share of non-credit current assets, including regulatory requirements, the need for revenues diversification or effective liquidity management, and the effects of such decisions depend on various factors, whether macroeconomic, sectoral or individual. The paper aims to assess the role of securities for the stable and safe operation of cooperative banks in Poland and to try to answer the question of whether these relations are similar to those in the commercial banking sector. The theoretical part of the paper includes a short definition overview related to the studied problem, i.e. identification of concepts related to the safety and stability of banks, financial instruments and the specificity of cooperative banks. In addition, an analysis was made of the regularities that can be encountered when shaping the optimal structure of assets in banks. To verify the research hypothesis about the positive impact of financial instruments on the stability of cooperative banks, a linear regression model was used. For measuring the stability the Z-Score indicator was adopted. The research period covered annualised monthly data for the period 12.2010–09.2021. Obtained results confirm the importance of the role played by financial instruments in building cooperative banks’ stability. The increase in the level of financial instruments had a beneficial effect on bank stability, but only when it took place in a smooth manner and, in addition, when their share in the asset structure was small.

What drives green banking operations in Bangladesh? Findings from PLS-SEM and BSEM

PurposeEnvironmental threats are becoming severe in developing and undeveloped countries. It urges to know how green banking operations can foster sustainable development in these regions. This study aims to provide empirical evidence of the determinants of green banking operations in Bangladesh.Design/methodology/approachBased on the socially responsible investing (SRI) theory, this study examined the hypothesized relationships using a partial least square structural equation modeling (PLS-SEM) approach. The Bayesian SEM (BSEM) through a Markov Chain Monte Carlo (MCMC) approach was also used to validate the study's first-order model.FindingsThe findings show that sustainable innovativeness, green investment and green banking policy substantially and positively change green banking operations. Notably, green investment is the most influential predictor of green banking operations, driving banks to establish sustainable economic systems within the country.Practical implicationsThe findings offer valuable guidance for scholars, financial institutions, policymakers and bank managers to develop and implement effective strategies for green banking operations. These strategies may significantly contribute to achieving the sustainable development goals (SDGs) in Bangladesh.Originality/valueThis study is ground-breaking in associating sustainable innovativeness and green banking operations from a developing country. It enriches our understanding of green banking, aligning with existing literature. Additionally, PLS-SEM and BSEM provide strong validation of the proposed theoretical model.

Optimal data-driven strategy for in-house and outsourced technological innovations by open banking APIs

AbstractOpen banking is a customer consent-driven data-sharing framework to maintain interoperability among financial and non-financial institutions through secure application programming interfaces. Traditional retail banks are losing their competitive edge against digital banks, FinTech, and BigTech firms due to a higher outflow of customer account data than inflow. These firms capitalize on open banking data to launch innovative products and introduce “ready-to-deploy” Banking-as-a-Service platforms for end-to-end banking operations without the need to build full-scale infrastructures. Therefore, banks must reshape data-driven strategies to stay competitive. This research proposes a decision-support tool to select optimal digital strategies using the Strategic Value Index (SVI), a metric derived from analyzing multiple strategic objectives of bank stakeholders. The SVI minimizes implementation time and costs while maximizing operational action importance to a balanced digital strategy that combines both in-house and outsourced technological developments. The importance of operational action is quantified using evidential reasoning with fuzzy logic to address the challenge of aggregating incomplete and ambiguous banking data and assessments from multiple stakeholders. The theoretical approach is validated through a real application in a Latin American bank, and its findings are globally transferable. Cost and time data were sourced from public repositories, as made available accessible through government-mandated disclosures. The sensitivity analysis revealed that hybrid in-house and outsourced development is more flexible in meeting tight timelines and budget constraints. The combined approach is more cost-effective, time-efficient, and aligned with the internal needs of banks compared to either entirely in-house or fully outsourced models.

Islamic Finance and Economic Growth: Empirical Evidence from Panel ARDL Approach

Abstract This paper applied the pooled Mean Group (PMG) /ARDL approach to examine the effect of Islamic finance on economic growth of Brunei, Indonesia, Jordan, Kuwait, Malaysia, Nigeria, Oman, Pakistan, Saudi Arabia, Sudan, Turkey and United Arab Emirates. Using variables such as gross domestic product growth rate as the dependent variable, Total Assets of Islamic Banks, Total Revenue of Islamic Banks, Total Islamic Banks financing and Sukuk Holdings as the independent variables for the period 2014Q1 – 2022Q4. Panel unit root test was carried out to ascertain that no variable was integrated of order 2. To achieve these four different types of panel unit root tests Im, Pesaran and Shin, ADF-Fisher, PP-Fisher and Levin Lin Chu tests were applied. The estimated pooled Mean Group (PMG) model established the existence a negative but significant long-run relationship between Islamic finance and economic growth of the selected countries with the exception of total assets of Islamic banks which shows a positive and statistically significant relationship with economic growth. The validity of this finding was supported by the error correction coefficient which was negative and statistically significant. Consequently, to achieve growth in GDP the study recommends that policymakers should focus on implementing policies that promote a conducive environment for Islamic banking activities and stimulate demand for Sharia-compliant financing. Another key policy recommendation is to develop a supportive regulatory framework that accommodates Islamic finance principles and facilitates the growth of Islamic banking operations. JEL classification numbers: F43, C33. Keywords: Islamic Finance, Economic Growth, Sukuk, Panel ARDL.

Event-Driven Architecture: Harnessing Kafka and Spring Boot for Scalable, Real-Time Applications

This comprehensive article explores the transformative impact of Event-Driven Architecture (EDA) in modern financial services, focusing on its implementation using Apache Kafka and Spring Boot. The article examines how financial institutions have revolutionized their transaction processing capabilities through EDA adoption, achieving significant improvements in system performance, reliability, and customer experience. Through a detailed examination of real-world implementations, the analysis demonstrates how EDA has enabled banks to handle unprecedented transaction volumes while substantially reducing system latency and improving resource utilization. The integration of Kafka and Spring Boot has proven particularly effective, with major financial institutions leveraging these technologies to achieve superior performance metrics and system availability. The article further explores critical patterns, including event sourcing, CQRS, and saga patterns, alongside cloud-based best practices for monitoring, performance optimization, and security implementations. By examining various implementation strategies and their outcomes, this article provides a comprehensive framework for building scalable, resilient financial systems that meet the demanding requirements of modern banking operations while ensuring regulatory compliance and maintaining high security and reliability standards.

Exploration of Reliability and Security of E- Banking: Selected Urban Cooperative banks

The rise of E-banking has introduced unprecedented convenience and accessibility for users, transforming traditional banking operations into efficient online experiences. However, this shift brings challenges, particularly in terms of security and reliability, as users now expect robust protections for their financial data and consistent, dependable service. This study investigates the perceptions of security and reliability in digital banking among 290 urban cooperative banking customers. Using factor analysis, we explore key dimensions of e-banking services, focusing on elements like encryption, biometric security, and trust in transaction reliability. The analysis identified two primary factors: security and reliability, each with distinct contributions to overall user satisfaction. The factor loadings revealed that users had mixed confidence in encryption technologies and data privacy measures, with some expressing high levels of satisfaction, while others indicated significant concerns. Additionally, reliability emerged as a critical factor, with findings indicating that a notable portion of customers were dissatisfied with the timeliness and trustworthiness of e-banking services. For data collection, a structured survey measured responses on a five-point Likert scale, assessing variables such as trustworthiness, encryption effectiveness, privacy maintenance, and personal security practices. Through the use of descriptive and factor analysis, we quantified customer sentiments and identified patterns in user satisfaction. The results suggest that while there is moderate confidence in digital banking security, the reliability of service delivery remains an area for improvement. Banks should consider addressing these findings by enhancing transparency in their security protocols and strengthening service consistency to better meet user expectations in digital banking environments.

The untapped potential of 3D virtualization using high resolution scanner-based and photogrammetry technologies for bone bank digital modeling

Three-dimensional (3D) scanning technologies could transform medical practices by creating virtual tissue banks. In bone transplantation, new approaches are needed to provide surgeons with accurate tissue measurements while minimizing contamination risks and avoiding repeated freeze-thaw cycles of banked tissues. This study evaluates three prominent non-contact 3D scanning methods—structured light scanning (SLG), laser scanning (LAS), and photogrammetry (PHG)—to support tissue banking operations. We conducted a thorough examination of each technology and the precision of the 3D scanned bones using relevant anatomical specimens under sterile conditions. Cranial caps were scanned as separate inner and outer surfaces, automatically aligned, and merged with post-processing. A colorimetric analysis based on CIEDE2000 was performed, and the results were compared with questionnaires distributed among neurosurgeons. The findings indicate that certain 3D scanning methods were more appropriate for specific bones. Among the technologies, SLG emerged as optimal for tissue banking, offering a superior balance of accuracy, minimal distortion, cost-efficiency, and ease of use. All methods slightly underestimated the volume of the specimens in their virtual models. According to the colorimetric analysis and the questionnaires given to the neurosurgeons, our low-cost PHG system performed better than others in capturing cranial caps, although it exhibited the least dimensional accuracy. In conclusion, this study provides valuable insights for surgeons and tissue bank personnel in selecting the most efficient 3D non-contact scanning technology and optimizing protocols for modernized tissue banking. Future work will advance towards smart healthcare solutions, explore the development of virtual tissue banks.