Sustainable Banking Research Articles

Artificial Intelligence Adoption in Sustainable Banking Services: The Critical Role of Technological Literacy

This study explores how customers recognize and accept artificial intelligence devices (AIDs) in the realm of sustainable banking services, applying the Artificially Intelligent Device Use Acceptance (AIDUA) model. This research not only seeks to corroborate the AIDUA model in the banking sector, but also aims to enrich it by introducing technological literacy as a moderating factor, particularly in the perspective of sustainable banking. Data were collected through 435 valid, self-administered face-to-face surveys from bank customers in China, determined through convenience sampling. The hypotheses, covering both direct and moderating effects, were examined using structural equation modeling. This study verifies the applicability and reliability of the AIDUA model, in assessing customer acceptance of AIDs within sustainable banking services. The findings indicate that customer acceptance of AIDs unfolds in three distinct phases. Initially, the consumers’ perceptions of social influence (SI), hedonic motivation (HM), and perceived anthropomorphism (PA) positively influence their green performance expectancy (GPE) and green effort expectancy (GEE) concerning AIDs. As a result, greater GPE and GEE among bank customers lead to stronger positive emotions, which greatly contribute to increased AIDs usage and a reduction in resistance to their implementation. Additionally, the findings determine that technological literacy plays a substantial moderating role in the association connecting green performance expectancy and customer emotions in relation to adopting AIDs, thereby highlighting its importance in advancing sustainable banking initiatives.

THE IMPACT OF GREEN FINANCE ON BANKING PERFORMANCE IN INDONESIA

Green Finance refers to financial practices that can be described through financial services and products that take environmental sustainability to support sustainable development. The role of green finance is to connect financial goals with the environment to encourage inclusive economic growth. One form of green finance implementation is in financial institutions, especially banking. This study aims to analyze the impact of green finance implementation in the banking sector on banking performance as proxied by the profitability ratio in the 2018-2022 period. The Generalized Method of Moments (GMM) dynamic panel is used. The Green Daily Operation (GDO) and Green Finance Policy (GFP) variables indicate the implementation of green finance in banking. Other independent variables use banking performance ratios consisting of the capital adequacy ratio, non-performing loans, and the bank's operational efficiency ratio. The study results show that green finance represented by implementing GFP can increase profitability, while GDO does not significantly affect banks' profitability in Indonesia. Furthermore, the internal banking ratio that is not significant to profitability is the capital adequacy ratio, while increasing non-performing loans and operational efficiency ratio significantly negatively impacts bank performance because it reduces profitability. This research supports applying the green concept in the banking sector to improve sustainable bank performance.

SUSTAINABLE ISLAMIC FINANCE: BIBLIOMETRIC AND VISUALIZED ANALYSIS OF CURRENT EMPIRICAL RESEARCH

This study aims to develop the research gap in sustainable Islamic Finance using a bibliometric analysis of recent empirical research outputs in the area, which comprises publications in scholarly journal articles and book chapters. Data were collected from Scopus for the period 1997 – 2022. This study analyses 285 Scopus scientific documents using Vosviewer, RStudio and Biblioshiny for bibliometric tools to process scientific documents extracted from various sources. Our study shows that the most prominent word in the Scopus scientific papers on Sustainable Islamic Finance is Islamic finance, followed by sustainable development, finance, banking, and investments. The keywords that Scopus scientific documents use little on the topic are ethical investing, climate change, Islamic social finance, waqf, zakat, takaful, green sukuk, and microfinance. There is a clear gap in knowledge around Islamic financial instruments in research that follow our findings and would benefit from further research.

Environmental, Social, and Governance Scores and Loan Composition Inside United States Banks

We analyze the loan portfolios of United States banks from 2013 to 2023, showing that high environmental, social, and governance (ESG) banks have larger shares of consumer loans and commercial loans and smaller shares of construction loans and real estate loans. We also find that the governance pillar (G) is more tightly related to the bank loan composition compared to the environmental (E) and social (S) pillars. Furthermore, we show that construction loans and real estate loans decrease more considerably with bank ESG scores inside countries with high gas emissions, i.e., where ESG issues would arguably be more serious. Our interpretation is that sustainable banks are reluctant in lending money for real estate projects, exposing them to potentially high ESG risk. These findings contribute to developing a deeper insight about the relationship between ESG and bank lending, which, in the previous literature, has been treated more frequently in aggregate terms instead of separating loan types. Our outcomes suggest that sustainability is crucial for the availability of funds in the real estate sector, delivering important insights to bank and real estate managers, besides policy makers.

Green banking practices: Towards sustainable banking sector for financial inclusion in attaining Saudi Arabia’s Vision 2030

Green banking practices: Towards sustainable banking sector for financial inclusion in attaining Saudi Arabia’s Vision 2030

A Sustainable Future : The Importance and the Development of Sustainable Finance In the 21st Century

The environmental problems that have emerged along with rapidly increasing global warming in recent years have made the concept of sustainability an important issue in the world in general. This fact has been largely effective in increasing the sensitivity of businesses and leading corporations to the environmental problems. This situation has led businesses to implement environmental friendly policies and invest in these areas, both interms of efficient use of natural resources and minimizing the damage to the environment. With the increasing global warming, climate change has recently become one of the most important problems in the world, and many countries have started to make efforts to reduce the risk of climate change. The inadequacy of environemental measures taken so far has necessitated the search for solutions in different areas regarding this issue. In this sense, financial institutions also contribute to climate awareness by following environmental policies in their activities and developing products that prioritize the environment. The concept of sustainable finance has led to the development of various financial products and to the development of financing projects aimed at protecting the environment. While the concept of sustainable finance is perceived as the responsibility of public authorities, the private sector has also been included in the process with the Sustainable Development Goals in the UN 2030 Agenda. There is no doubt that sustainable banking and finance practices, especially the implementation of sustainability practices by banks and other corporations in developing countries will contribute to the development of these countries considerably. In this study, it is aimed to draw attention to the global climate crisis, to emphasize the relationship between finance and the environment, and to contribute to the increase of applications in this field in the world by introducing green financing tools. One of the important functions of sustainable finance against the climate crisis is the evolution of companies funded within the scope of ESG criteria into a production process that tends to be sensitive to carbon emissions, as well as acquiring social and governance sensitivity. In this way, an economic process can be carried out on the axis of environmental and social awareness. In addition to combating climate change, it can be an important supporter in achieving the Sustainable Development Goals.

The Role of Sustainable Competitive Advantage on Sustainable Finance and Bank Profitability

This study examines the moderating effect of sustainable competitive advantage on the relationship between sustainable finance and bank profitability of Indonesian conventional commercial banks from 2019 to 2022. The study has found that sustainable finance has a positive impact on bank profitability (ROA and ROE). However, the impact of sustainable competitive advantage on bank profitability was only positive with ROA, suggesting that ROA is a more effective indicator of bank profitability for this study. Furthermore, the study indicates that the impact of sustainable finance on bank profitability (both ROA and ROE) is diminished by the delay in the implementation of sustainability reporting during the COVID-19 reporting period. The results of this study are likely to encourage banks to increase their sustainable finance and focus on improving the quality of sustainability reporting in order to gain a competitive advantage in the current banking industry landscape in Indonesia.

Analysis Of Home Ownership Credit (KPR) Financing Flpp Prosperity For Customers Low Income (Case Study of Bank BJB Medan Branch Office)

This research aims to evaluate the effectiveness of Sejahtera Home Ownership Credit (KPR) financing through the Housing Financing Liquidity Facility (FLPP) scheme implemented by Bank BJB for Low Income Communities (MBR). The research method used is descriptive qualitative with data collection through in-depth interviews, observation and documentation analysis. The research results show that the FLPP Prosperous KPR program run by Bank BJB has a high level of effectiveness in helping MBR have livable houses. This effectiveness is supported by several factors, including easy access to financing with low interest rates and flexible terms, significant government subsidy support, increasing the welfare of MBR through home ownership, Bank BJB's active role in socialization and education, high levels of realization and customer satisfaction. , as well as good collaboration with developers. With this achievement, the FLPP Prosperous KPR program is proven to be able to provide more affordable financing solutions and contribute to improving the quality of life for MBR. It is hoped that the results of this research can become a reference for developing more inclusive and sustainable banking policies.

Evaluating the Impact of Customer Engagement on Customer Retention for Sustainable Bank Operations

Evaluating the Impact of Customer Engagement on Customer Retention for Sustainable Bank Operations

The Future of Sustainable Banking in India: Trends, Challenges, and Opportunities

The Future of Sustainable Banking in India: Trends, Challenges, and Opportunities

A knowledge-based directional multicriteria framework with defuzzified subset of preferences for sustainable banking strategy analysis

PurposeThis article presents a methodological application of decision support with the purpose of identifying and better aligning sustainable banking strategies. Those strategies are based on best practices declared by employees and conducted during efficient periods affecting sustainable production, the health quality of clients, the organization’s profitability and social impact on the local community across different sectors.Design/methodology/approachThe approach involves a two-phase process: first, it employs directional data envelopment analysis (DEA) to benchmark knowledge based on employee opinions gathered through interviews to evaluate strategies related to banking services; then, using the best-worst method and ELECTRE outranking incorporating elements of fuzzy set theory based on an experienced decision-maker’s input, sustainable banking strategies are ranked according the different perspectives for leveraging outputs from the first step.FindingsThe outcomes yield a ranking of strategies, emphasizing the crucial role of technology in banking services while highlighting the need for more agile services to ensure customer satisfaction. This underscores the necessity of aligning with the market perspective, as fintech companies are reshaping the socio-technological-environmental landscape of financial services.Research limitations/implicationsThe research combined DEA and multicriteria analysis in the context of the banking sector, providing a comprehensive and analytically robust approach translated as a decision-making framework for promoting sustainability by aligning operational efficiency and social responsibility. These tools can guide banks in adopting more sustainable practices that benefit the institution, society and the environment.Practical implicationsDecisions in the banking sector encompass a wide array of concepts, from internal technical factors to customer feedback on service processes and offerings. The proposed approach considers decision analysis in complex environments, and the application developed in this study considered not only internal banking activity-oriented concepts but also the preferences of human agents developing them and the managerial perspective focused on issues involving components associated with sustainability.Originality/valueBy integrating DEA with multicriteria analysis, this study paves the way for a more efficient, environmentally conscious and socially responsible management scenario in the Brazilian banking sector. This research assesses operational efficiency and offers a comprehensive framework for selecting and implementing sustainable practices in the banking sector.

Does Mediation Matter in Explaining the Relationship between ESG and Bank Financial Performance? A Scoping Review

This study identifies and synthesizes patterns and trends in the emerging body of literature of environmental, social, and corporate governance (ESG) endeavors on the financial performance (FP) of the banking firms. It specifically aims to highlight the relationship of ESG–FP. The scoping review analysis is based on 1856 journal articles from two online databases, namely Scopus and Web of Science (WoS) for the period of 2015 to 2023. The analysis reveals inconsistent results regarding the ESG–FP relationship, with some studies reporting positive impacts, others negative, and several showing no significant relationship. Notably, non-linear studies consistently identify an inverted U-shaped relationship, suggesting that there is a threshold level of ESG investment beyond which additional investments do not yield proportional benefits. This indicates that threshold-based policies may be more effective at maximizing ESG benefits. The study also found that numerous studies suggested exploring the indirect effect or mediating variables in the ESG–FP relationship to better explain the FP variance. Thus, the study identifies a need for future research to explore indirect relationships by testing potential moderators or mediators, particularly bank risk-taking, to better understand the ESG–FP dynamics. Policymakers and regulators should adopt non-linear analytical approaches and set threshold-based ESG investment policies, while bank management should strategically invest in ESG activities, integrating ESG considerations into risk management frameworks. Continuous monitoring and evaluation, along with stakeholder engagement, are crucial for optimizing ESG investments. By adopting these strategies, banks can enhance financial performance and contribute to sustainable and responsible banking practices.

Sustainable Primary Cell Banking for Topical Compound Cytotoxicity Assays: Protocol Validation on Novel Biocides and Antifungals for Optimized Burn Wound Care

Thorough biological safety testing of topical therapeutic compounds and antimicrobials is a critical prerequisite for appropriate cutaneous wound care. Increasing pathogen resistance rates to traditional antibiotics and antifungals are driving the development and registration of novel chemical entities. Although they are notably useful for animal testing reduction, the gold standard in vitro cytotoxicity assays in continuous cell lines (HaCaT keratinocytes, 3T3 fibroblasts) may be discussed from a translational relevance standpoint. The aim of this study was thus to establish and validate a sustainable primary cell banking model with a view to performing optimized in vitro cytotoxicity assay development. Primary dermal fibroblasts and adipose-derived stem cell (ASC) types were established from four infant polydactyly sources. A multi-tiered primary cell banking model was then applied to prepare highly sustainable and standardized dermal fibroblast and ASC working cell banks (WCBs), potentially allowing for millions of biological assays to be performed. The obtained cellular materials were then validated for use in cytotoxicity assays through in vitro biosafety testing of topical antiseptics (chlorhexidine, hypochlorous acid) and an antifungal compound (AR-12) of interest for optimized burn wound care. The experimental results confirmed that IC50 values were comparable between cytotoxicity assays, which were performed with cell lines and with primary cells. The results also showed that hypochlorous acid (HOCl) displayed an enhanced toxicological profile as compared to the gold standard chlorhexidine (CLX). Generally, this study demonstrated that highly sustainable primary cell sources may be established and applied for consistent topical compound biological safety assessments with enhanced translational relevance. Overall, the study underscored the safety-oriented interest of functionally benchmarking the products that are applied on burn patient wounds for the global enhancement of burn care quality.

The Impact of Financial Stability and Audit Firm Affiliation on the Level of Disclosure of Sustainable Green Banking

The Impact of Financial Stability and Audit Firm Affiliation on the Level of Disclosure of Sustainable Green Banking

Bank Business Sustainability: Bibliometric Analysis

Economic development that only focuses on growth often has negative impacts, encouraging the emergence of the concept of sustainable development that balances economic, environmental, and social aspects. This concept, supported by the United Nations and various parties, is the basis for sustainable development goals until 2030, covering human, social economic, and environmental development. Sustainability, introduced in 1987, integrates environmental, social, and economic aspects or the triple bottom line in business standards and practices. The development of sustainable banking is still in its infancy, with some banks starting to adopt environmental and social policies. This research examines risk policies to support sustainable development in commercial banking through an analysis of 50 articles. The results show that economic and social efficiency, stability, and environmental contribution are important in assessing bank sustainability. Internal factors such as risk management and financial health, as well as external factors such as regulations and macroeconomic conditions are very influential.

Understanding Regulatory Changes: Deep Learning in Sustainable Finance and Banking

This paper examines the regulatory impact on the European Banking Sector using advanced deep learning techniques to analyze the relationship between Sustainable Finance guidelines and the SX7P Index from January 2012 to December 2023. Utilizing Long Short-Term Memory Auto-encoder (LSTM-AE), Variational Autoencoder (VAE), and Convolutional Neural Network (CNN) for anomaly detection, the study compares anomalies and investigates their correlation with European Banking Authority (EBA) events and Sustainable Finance guidelines from January 2020 to December 2023. Through the analysis of 43 pertinent EBA documents, the research identifies patterns and variations in anomalies, assessing their association with regulatory changes. The results reveal significant anomalies aligning with regulatory events, indicating a potential causal relationship. Notably, the VAE methodology shows the strongest correlation between EBA Sustainable Finance events and anomalies. This research advances the understanding of deep learning applications in financial markets and offers valuable insights for policymakers and financial institutions regarding regulatory shifts in Sustainable Finance.

How socially sustainable multinational banks promote financial inclusion in developing countries

This paper investigates the impact of multinational banks (MNBs) implementing socially sustainable practices on financial inclusion in developing countries. We argue that the specific characteristics of the MNBs, when combined with socially sustainable practices, contribute to building trust and reducing risks in developing countries where they operate. This positive externality causes improvements for the underprivileged in three dimensions of financial inclusion: their demand for bank accounts, their propensity to save, and their access to credit. A sample of 152 multinational banks in 32 developing countries and 37,952 individuals proves the positive effect of sustainable practices.

Literasi Perbankan Syariah Untuk Meningkatkan Akselerasi Inklusi Keuangan (Studi pada Bank Syariah Indonesia (BSI) KCP Probolinggo)

This research aims to analyze the literacy used by syariah banking in increasing the acceleration of financial inclusion at BSI KCP Probolinggo. This research explores the impact of the role of syariah banking literacy on accelerating financial inclusion, in the context of inclusive and sustainable syariah banking. This topic was chosen to fill the gap in understanding the contribution of syariah banking literacy to the development of financial inclusion, which is a crucial aspect in building a sustainable syariah financial institutional environment. The qualitative approach used in this research is a case study type. The selection of objects at BSI KCP Probolinggo was based on considerations because the bank is one of the syariah financial institutions that plays an important role in the development of syariah finance in the Probolinggo area. The techniques used to collect research data consist of in-depth interviews, participant observation, and documentation. Where the research data consists of primary data obtained from several research informants, namely the director of BSI KCP Probolinggo, three employees of BSI KCP Probolinggo, five customers of BSI KCP Probolinggo. Meanwhile, secondary data was obtained from national and international journals that were relevant to research. The data analysis techniques used consist of data reduction, data display, and drawing conclusions. The research results show that syariah banking literacy in increasing financial inclusion is carried out by providing financial education, holding promotions and marketing, and conducting outreach through various media. Syariah banking literacy has a significant impact on increasing financial inclusion.

Analisa Faktor Yang Mempengaruhi Financial Sustainability Ratio Sektor Perbankan Di Bei Periode 2019-2022

Financial Sustainability in banking is one of the important things to measure the bank's sustainability in the future, especially from a financial perspective. The sustainability of the banking sector must be a concern because there are many parties who will have an impact if a bank experiences failure to operate, especially in its finances. This research aims to examine the influence of BOPO, DebtToEquity, ReturnOnAsset, LDR, Directors, Commissioners on the Financial Sustainability Ratio (FSR) in Idx banking sector companies -Ic Period 2019-2022. Sampling was carried out using purposive sampling technique. This type of research uses multiple linear regression methods. The object of this research is the Idx-Ic banking sector financial report for the 2019-2022 period. The research results show that only the Director variable of the six independent variables used has an influence on the Financial Sustainability Ratio (FSR) and the research model is suitable for use. Companies that want to maintain the FSR value should pay attention to the number and selection of directors they have.

Impact of Corporate Social Performance on Financial Performance: Evidence from Islamic Banks, Conventional Banks and Social Banks

Purpose — This study aims to assess the impact of banking models on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) in determining a viable model for sustainable banking. Design/Methodology/Approach — The study uses a cross-country sample of 117 financial institutions across 36 countries over an 8-year observation period between 2013 and 2020. To address heterogeneity and endogeneity issues, the authors use the System Generalised Methods of Moments (GMM) estimation models. The study also constructs a novel CSP Index as the independent variable for the research. This CSP Index comprises six indicators reflecting dimensions of financial inclusion and intermediation, serving as proxies for sustainable banking. Findings — The findings reveal that the distinct banking models have a significant impact and can alter the direction of the CSP-CFP relationship. Specifically, the conventional banking (CB) model exhibits a statistically significant negative association between CSP and CFP. Conversely, the Islamic banking (IB) model emerges as a promising avenue for sustainable finance, indicating that increased corporate social responsibility (CSR) activities within Islamic banks (IBs) lead to greater profitability. This difference arises from the inherent strengths of the IB system in conducting financial intermediation and inclusion activities. This contrasts with the CB model’s reliance on debt-based instruments, which exacerbates risk and detrimentally impacts financial performance. The findings also show that the social banking (SB) model has a significant effect on the CSP-CFP relationship. Originality/Value — The findings give new insights into the longstanding debate on the CSP-CFP relationship by examining the impact of banking models. Introducing a novel CSP Index, characterised by its objectivity and verifiability, addresses the prevalent issue of bias inherent in the CSP indices of previous studies.