Financial Services Sector Research Articles

Data analytics as a driver of digital transformation in financial institutions

Data analytics plays a pivotal role in driving digital transformation within financial institutions, enabling organizations to leverage insights from vast amounts of data to enhance decision-making and optimize operational performance. This paper explores the multifaceted impact of data analytics on the financial services sector, highlighting how it can improve customer experience, streamline processes, and foster innovation. By implementing advanced analytics techniques, financial institutions can better understand customer behaviour, identify market trends, and personalize services to meet evolving customer needs. The study discusses effective strategies for integrating data analytics into decision-making processes and operational workflows, emphasizing the importance of creating a data-driven culture that encourages collaboration across departments. Case studies of leading financial institutions that have successfully integrated data analytics into their operations illustrate the transformative outcomes, including improved customer satisfaction and increased revenue growth. Additionally, the paper addresses challenges such as data silos, regulatory compliance, and the need for skilled personnel to analyse and interpret data effectively. To overcome these hurdles, best practices are outlined, including investment in robust data infrastructure, fostering cross-functional teams, and ensuring continuous training for employees. The findings indicate that a strategic approach to data analytics not only enhances performance but also positions financial institutions to adapt to rapidly changing market conditions. Ultimately, this paper underscores the critical role of data analytics in shaping the future of financial services and achieving sustainable growth in an increasingly competitive landscape.

Optimizing Business Processes: Harnessing Robotic Process Automation in Chinese Enterprises

Abstract: With the continuous development of science and technology, the study of digital technology in China has become increasingly in-depth. As an effective means for enterprises to achieve automated management and standardized operations, Robotic Process Automation (RPA) has attracted widespread attention. RPA process automation technology can improve the efficiency of financial management and ensure the quality of work while meeting enterprise development needs. This study explores the multifaceted applications and impact of RPA in the financial shared services sector. By utilizing RPA, companies can streamline processes, reduce costs and increase overall operational flexibility. The study delves into the theoretical underpinnings of RPA adoption, drawing on concepts such as economies of scale, process reengineering and information processing theory. In addition, the paper illuminates the transformative impact of RPA on business operations through field case studies, including the pioneering efforts of Sinochem International. By providing a comprehensive analysis of the pros and cons of RPA implementation, this paper provides valuable insights for Chinese companies seeking to optimize their business processes and embrace the era of intelligent automation.

The impact of audit on IT governance: A study of the financial services sector in Ghana

AbstractIn recent years, IT governance has been a subject of discussion among academics and practitioners. The concern has been on the need to implement governance mechanisms and ensure the right balance of these mechanisms. However, the audit of IT governance mechanisms has received very little attention. This paper aims to analyse the overall impact of IT governance audits on the maturity and coherence of governance mechanisms. Guided by the configurational theory, the researchers argue that when governance mechanisms operate coherently and are regularly audited, there will be improvement in IT governance and the performance of financial institutions. In this study, seven financial services companies in Ghana were reviewed, and their IT governance maturity was assessed after seven months of auditing with a COBIT 5‐driven IT audit framework. Two surveys were conducted, one before and one after the auditing. The findings of the study confirm the claim that regular auditing improves IT governance maturity and coherence. Several governance mechanisms within the case organizations improved to one higher level of maturity on the Capability Maturity Model. This improvement was after seven months of auditing. Regular auditing also improved IT roles and responsibilities, empowered IT personnel and improved the IT budgetary control and architecture of the entities. This study has implications for practice. It emphasizes the importance of independent regular IT auditing and the need to ensure coherence among IT governance mechanisms if effective IT governance is to be achieved in financial institutions.

ФОРМУВАННЯ НА СУЧАСНОМУ ЕТАПІ РИНКУ ФІНАНСОВИХ ТЕХНОЛОГІЙ В СВІТОВІЙ ЕКОНОМІЦІ

The current stage of development of the world economy is characterized by the process of increasing the role of the financial sector, as well as the transition to a new phase of development - innovation. Globalization in financial innovations is critical in international innovative development in today's conditions. The rapid spread of financial innovations under the conditions of financial globalization has become the main driver of the formation of the world economic system, contributing to the deepening of financial globalization. The formation of the financial services market is uneven because various factors influence it, including the level of development of information and communication technologies, the stability of the financial sector, and others. These factors have been studied by researchers, but the development of specific segments of the fintech market has its peculiarities. Fintech is a complex system that unites the sectors of new technologies and financial services, startups, and the relevant infrastructure. The financial services sector is increasingly actively using new technologies and tools to perform its functions and implement fundamentally new solutions in which consumers of services are interested. New technologies inherently changed not only the historically formed landscape of providing financial services, giving it freshness and dynamics, but also changed the attitude to such a concept as "money", realizing the transition from cash to virtual money in a reasonably short period. The industry provides subjects of financial relations with a wide range of innovative technologies, among which robotics, biometrics, remote banking, P2P lending, and many others have become vital. The fintech industry is expected to grow due to increased market penetration rates for existing services and their international expansion. The transition from the traditional financial services system to a digital one provides excellent opportunities for large financial companies and FinTech startups to work with banks or financial organizations. As more critical financial infrastructure projects come into production, more players will be interested in implementing digital financial technologies.

Unveiling asymmetric return spillovers with portfolio implications among Indian stock sectors during Covid-19 pandemic

This paper aims to provide a systematic inquiry into the return spillover dynamics between a network of Indian sectoral indices during the pre- and post-pandemic periods. To analyze the same, this paper uses the asymmetric time-varying parameter vector autoregressions (TVP-VAR) framework. Furthermore, in the spirit of Broadstock et al. (2020), we perform dynamic portfolio exercises based on common hedging techniques and the minimum connectedness portfolio approach to determine what better captures asymmetry. Our daily dataset includes 12 sectoral stocks spanning from January 01, 2017, to May 5, 2023. The findings reveal that negative connectedness dominates throughout the sample period, demonstrating that profit-maximizing agents and risk-averse investors are more likely to react negatively to news. We also show that in the network, the average net transmitters are the banking and other financial service sectors, whereas the net receivers are the information technology, pharmaceutical, and fast-moving consumer goods sectors throughout the period under consideration. Our results show that the minimum connectedness portfolio (MCoP) approach is a very useful method based on Sharpe ratios, as it is either the first or second most profitable among these three competing methods. These results, therefore, yield valuable insights for policymakers and investors

The effect of service concept on customer acquisition: the moderating role of manager’s experience on Savings and Credit Cooperative Societies in Tanzania

PurposeThis study aims to investigate the influence of the service concept on customer acquisition and when the relationship is moderated with manager’s experience in Savings and Credit Cooperative Societies (SACCOS) within Dar es Salaam City, Tanzania.Design/methodology/approachThe study adopts a cross-sectional research design and utilizes simple random sampling to select 226 respondents, all of whom are managers of SACCOS in Tanzania. Data were collected through a questionnaire and analyzed using a partial least square structural equation modeling (PLS-SEM).FindingsThe findings indicate that service concept have a highly statistically significant impact on customer acquisition, with a p-value of less than 0.05. Conversely, managers’ experience also influences customer acquisition by the p-value of less than 0.05. The result also confirms the significance influence of positive moderating effect of manager’s experience on the relationship between service concept and customer acquisition, with a p-value of less than 0.05, therefore it shows that manager’s experience facilitate the influence of service concept to customer acquisition.Practical implicationsThe findings of this study provide valuable insights for SACCOS aiming to thrive and attract more customers. By understanding the nuances of service concepts, these institutions can refine their strategies for customer acquisition effectively.Originality/valueThe study’s insights into the composite effect of service concepts hold significance for SACCOS seeking to enhance their customer acquisition strategies enhanced by manager’s experience. These findings contribute new perspectives to the SACCOS and other related financial services sector, offering fresh insights into innovation and customer-centric approaches.

Digital Transformation in Financial Services and FinTech: Trends, Innovations and Emerging Technologies

Purpose: This research investigates the transformative impact of digital innovations within the financial services sector, particularly focusing on the evolution of digital banking and FinTech. The study aims to explore how digital banking products are being developed to enhance financial literacy and promote financial inclusion across diverse populations. Methodology: The research employs a comprehensive analysis of current trends and technologies, utilizing case studies and data-driven insights to assess the role of blockchain, artificial intelligence (AI), and machine learning in reshaping banking and financial services. The study examines the implications of these technologies on small business loans and wealth distribution. Findings: The findings reveal significant advancements in digital banking products, highlighting the increased accessibility and efficiency provided by these innovations. Emerging technologies have facilitated improved financial literacy and inclusion, particularly by enabling more accurate credit assessments and democratizing access to financial resources. The study underscores the pivotal role of AI in enhancing customer service through personalized experiences and predictive analytics. Unique Contribution to Theory, Policy, and Practice: This research makes a substantial contribution to academic theory by expanding the understanding of digital transformation in financial services. It provides critical insights for policymakers, emphasizing the importance of integrating technological advancements to foster financial inclusion and economic growth. Practically, the study offers strategic guidance for financial institutions seeking to implement innovative solutions, thereby improving service delivery and competitiveness in the evolving financial landscape. The research underscores the necessity for ongoing adaptation and investment in emerging technologies to meet the dynamic needs of consumers and businesses.

Impact of Technological Progress on Consumer Trust and Adoption of E-Banking

Abstract: In this research paper, I have thoroughly described the topic “Impact of Technological Progress on Consumer Trust and Adoption of E-Banking”. The financial services sector has seen a transformation due to the advent of technology improvements, especially with the increasing use of electronic banking, or e-banking. Traditional banking methods have been transformed by the advancement of digital technology, which has made it easier to create complex financial systems and services that are available via a variety of electronic devices. But even as these developments provide potential, a serious worry emerges about the complex relationship that exists between e-banking adoption, customer trust, and technical improvement. Building effective banking relationships requires a lot of trust, particularly in the digital sphere where fraud, privacy, and data security are major problems. The increasing dependence of customers on e-banking for financial operations necessitates a high degree of trust between the technology and the organizations providing these services. However, customer opinions of security, dependability, usability, and overall value are just as important in determining whether or not e-banking is adopted as a banking option as technical developments. To create an environment that is favorable for digital financial services, financial institutions and regulators need to understand the subtleties of customer trust and how it affects the adoption of e-banking in the context of technical improvements. In order to shed light on the opportunities, problems, and consequences in the rapidly changing field of digital finance, this paper will examine the complex relationship that exists between technological advancement, consumer confidence, and acceptance of e-banking. The abstract emphasizes the symbiotic link between trust and adoption, indicating that as trust in e-banking services grows, so does the adoption rate, underscoring the importance of technology innovation in reshaping the banking landscape.

Developing a robust security framework for inter-bank data transfer systems in the financial service sector

This paper explores the critical need for a robust security framework in inter-bank data transfer systems within the financial services sector. It reviews current security measures, identifies key vulnerabilities, and examines existing standards and protocols such as SWIFT and ISO 20022. Major security threats, including cyber-attacks and insider risks, are analyzed alongside technological, operational, and regulatory challenges. The impact of emerging technologies like blockchain and AI on security is discussed. Recommendations are provided for financial institutions to enhance security practices and for regulators to strengthen policy frameworks. The paper also highlights future research directions to address evolving security challenges in the financial sector.

Unravelling the CSR-financial distress link: The mediating role of capital structure in Jordan’s financial sector

This study investigates the relationship between corporate social responsibility (CSR), capital structure, and financial distress in Jordan’s financial services sector. It tests the mediating effect of capital structure on the CSR-distress linkage. Utilizing a panel data regression approach, the analysis examines a sample of 35 Jordanian banks and insurance firms from 2015–2020. CSR is evaluated through content analysis of sustainability disclosures. Financial distress is measured using Altman’s Z-score model. The findings reveal an insignificant association between aggregated CSR engagement and bankruptcy risk. However, capital structure significantly mediates the impact of CSR on financial distress. Specifically, enhanced CSR enables higher leverage capacity, subsequently escalating distress risk. The results advance academic literature on the nuanced pathways linking CSR to financial vulnerability. For practitioners, optimally balancing CSR and financial sustainability is recommended to strengthen resilience. This study provides novel empirical evidence on the contingent nature of CSR financial impacts within Jordan’s understudied financial services sector. The conclusions offer timely insights to inform policies aimed at achieving sustainable and stable financial sector development.

Cluster-based Systematic Literature Review: Understanding FinTech Adoption and Challenges

The FinTech market globally is emerging as an alternative to the traditional cash-driven economy. Although most of the population has adapted to the innovation that has taken place in the financial services sector, a substantial proportion of the population remains unbanked. It has a shallow awareness of the financial products and services available. Banks, financial service providers, investment advisers and business houses are attempting to adopt new technologies in collaboration with FinTech companies. Understanding consumer adoption and their experience of new technologies can help FinTech service providers integrate ideas and deliver seamless offerings. This article employs a systematic literature review of a total of 111 publications from 2016 to 2023 on the consumer adoption/acceptance of FinTech products and services. It identifies seven research clusters from the extant literature to note the trends in adoption and enlist the challenges faced by the usage of FinTech along with emerging trends in attention. The study used VOSviewer to provide the results of keyword analysis, world distribution and linkages of selected publications. The article explored the acceptance and reception of financial innovation in the past eight years as per the identified clusters which was shown by the increase in the number of publication’s chart. It also contributes to the field by mentioning the benefits that have been reaped across industries and sectors with the adoption of FinTech by discussing the participation of authors in various clusters in detail.

AI and Human Collaboration: The Future of HR in the Fourth Industrial Revolution

This study investigates the interplay of Adoption of Advanced HR Technologies, Workforce Management Effectiveness, Employee Engagement and Productivity, and Employee Performance within PT Danareksa (Persero), a prominent state-owned enterprise in Indonesia's financial services sector. Using a quantitative approach and Structural Equation Modeling (SEM) with Smart PLS, data from 80 employees were analyzed to explore the direct and indirect relationships among these variables. The findings reveal significant direct effects of Adoption of Advanced HR Technologies and Workforce Management Effectiveness on Employee Engagement and Productivity, highlighting their role in enhancing employee engagement and productivity levels. Moreover, both Adoption of Advanced HR Technologies and Workforce Management Effectiveness indirectly influence Employee Performance through their impacts on Employee Engagement and Productivity. These results underscore the critical importance of strategic investments in HR technologies and effective workforce management practices in optimizing organizational performance and competitiveness. This research contributes to understanding how HR innovations and management practices can foster a conducive work environment that drives employee performance and organizational success in the financial services industry.

Benefits and Challenges of Digital Transformation Technologies in the Financial Services Sector: A Case Study of two Commercial Banks in Zambia

This paper focuses on issues affecting digital transformation technologies (DTTs) in the financial services sector, especially banks. Many banks have made huge investments in technologies to guarantee uninterrupted operations and optimize service provision. This paper ascertains the benefits and challenges that contribute to the effective application of Digital Transformation Technologies (DTTs) in commercial banks. It explores various factors that impact the usage of DTTs and employee performance. The study methodology encompassed both qualitative and quantitative techniques. Online questionnaires were used to collect data. Bank Annual reports were analyzed to collect information that related to the aim of the study. Findings revealed that increased efficiency, improved data collection and innovation were the main benefits of using DTTs in the financial services sector. The main challenges identified in the study included employee resistance to change, complexity of systems and cybersecurity. Banks need to address these issues and recommendations were made for them to engage specific stakeholders for successful DTTs implementation and usage. Organizations must budget and allocate adequate finances to procure the technologies and train employees The findings of the study are expected to contribute to the body of knowledge on DTTs and provide valuable insights for policy makers to make informed decisions. Future research areas identified for further study include insurance, health, and manufacturing sectors with specific focus on Artificial Intelligence and Cloud computing technologies.

Authority of the consumer dispute resolution board (bpsk) in resolving consumer disputes in the financial services sector

Authority of the consumer dispute resolution board (bpsk) in resolving consumer disputes in the financial services sector

Integration of business intelligence and marketing: Enhancing corporate reputation in the financial services sector

This investigation extends into the intricate fabric of customer-based corporate reputation within the banking industry, applying advanced analytics to decipher the nuances of customer perceptions. By integrating structural equation modeling, particularly through SmartPLS4, we thoroughly examine the interrelations of perceived quality, competence, likeability, and trust, and how they culminate in customer satisfaction and loyalty. Our comprehensive dataset is drawn from a varied demographic of banking consumers, ensuring a holistic view of the sector’s reputation dynamics. The research reveals the profound influence of these constructs on customer decision-making, with likeability emerging as a critical driver of satisfaction and allegiance to the bank. We also rigorously test our model’s internal consistency and convergent validity, establishing its reliability and robustness. While the direct involvement of Business Intelligence (BI) tools in the research design may not be overtly articulated, the analytical techniques and data-driven approach at the core of our methodology are synonymous with BI’s capabilities. The insights garnered from our analysis have direct implications for data-driven decision-making in banking. They inform strategies that could include enhancing service personalization, refining reputation management, and improving customer retention efforts. We acknowledge the need to more explicitly detail the role of BI within the research process. BI’s latent presence is inherent in the analytical processes employed to interpret complex data and generate actionable insights, which are crucial for crafting targeted marketing strategies. In summary, our research not only contributes to academic discourse on marketing and customer perception but also implicitly demonstrates the value that BI methodologies bring to understanding and influencing consumer behavior in the banking sector. It is this blend of analytics and marketing intelligence that equips banks with the strategic leverage necessary to thrive in today’s competitive financial landscape.

PERAN SUKU BUNGA DALAM MEMODERASI PENGARUH SOLVABILITAS, LOAN TO DEPOSIT RATIO DAN NON PERFORMING LOAN TERHADAP PROFITABILITAS PADA BANK UMUM KONVENSIONAL PERSERO YANG TERDAFTAR DI OTORITAS JASA KEUANGAN PADA TAHUN 2015-2022

Banks are companies that operate in the financial services sector, acting as intermediaries between people who need funds and people who have funds. The purpose of this study was to analyze and test the role of interest rates in moderating the effect of Solvency, Loan Deposit Ratio and Non-Performing Loans on Profitability. The method used in this research is descriptive quantitative. The population in this study is a Conventional Commercial Bank registered with the Financial Services Authority in 2015-2022. Purposive sampling is the sampling technique in this study. Data analysis and hypothesis testing in this study used the Structural Equation Model - Partial Least Square (PLS-SEM). The results of hypothesis testing using a statistical application, Smart PLS 3.0, the results showed that Solvency has a significant negative effect on Profitability, Loan Deposit Ratio has a negative but insignificant effect on Profitability, and Non-Performing Loan has a significant negative effect on Profitability. Interest rates negatively but not significantly moderate the effect of Solvency on Profitability. Interest rates insignificantly moderate the effect of Loan Deposit Ratio on Profitability. Interest rates insignificantly moderate the effect of Non-Performing loans on Profitability.

Scripting mortgage fraud for the motion picture: “Fraud and its interrelationship with the financial services sector in the UK”

This article examines how mortgage fraud is organised in the United Kingdom, what the crime-commissioning processes are for its occurrence and what exogenous conditions and influences support its existence and its capacity to reproduce. The article aims to extend understanding beyond the micro-individual-level, such as causal agency, the biographies of actors and their social relations with one another; to a level of understanding that encompasses macro-structural and facilitative factors and conditions that exist in the financial services sector. The research strategy is supported by a multiple case study design, which involves the cross-case analysis of three multi-million-pound mortgage fraud conspiracies. The study combines criminology with sociological inquiry that employs Clegg’s circuits of power theory as a conceptual framework to examine how the roles and activities of fraudsters and key professional agents are otherwise supported by the convergence of dispositional and facilitative conditions and influences in the financial services sector. It is this circuit that supports the existence of mortgage fraud and its capacity to reproduce. Crime scripting is used as a means of transposing the circuits of power framework into criminological research, as the schema is representative of the interrelationship of the causal, dispositional and facilitative powers through which the organisation of mortgage fraud is possible.

Gender, Race and Sectoral Inequality in Megacities: Case Study of Banking and Financial Services Industry

This article explores the issue of inequality by using the example of the banking and financial services industry workers’ wages in 2022 in the most famous American metropolitan areas, focusing on 3 of its dimensions: gender inequality, racial inequality, and pay gaps in this sector compared to others. The study is based on data from the American Community Survey (ACS) conducted by the Census Bureau. Population-level figures are derived using the replicate weights calculated in the article using STATA 16.1 software (the information in the ACS is contained in raw microdata form, the ACS is a probability sample, so the sampling weights derived by factoring in the non-response bias are essential to arrive at the population-level estimates). The financial services sector plays a significant role in the economies of these metropolitan areas, employing an average of 7.77% of adult workers (the highest in Phoenix (10.41%) and Dallas (9.77%)). The study showed that in these megacities, financial services workers earned 64.77% more in 2022 than workers in other sectors of the local economy, with the highest gap in New York (111.24%) and Boston (80.81%). Women in the financial sector of these cities earn, on average, 65.59% less than men, with the largest gender gap in Chicago (71.84%) and Dallas (71.26%). The earnings gap for black and non-white workers compared to their white counterparts in the cities studied averaged 36.16%, with the largest sectoral gaps in Houston (60.14%) and Riverside (55.06%). The findings can inform the development of policies that promote equitable pay practices, enforce stronger anti-discrimination laws, and support diversity and inclusion initiatives within the industry.

Financial Year and Calendar Year Effects Across Indian Sectors: A Revisit from Investors Perspective

Anomalies in stock markets have been studied with varied approaches worldwide, and mixed outcomes exist. The present study has investigated the financial year and calendar year effect for indices from Indian markets. Sectoral indices from Indian markets have been incorporated in this study on the basis of their weightage in the stock market. Data from 2011 to 2023 have been engaged with historical prices of these indices taken from the stock exchange websites. The analysis has been carried out using the ordinary least squares regression method and the independent sample t-test. Weak anomalies have been documented in the case of the financial services sector. Therefore, the findings indicate rare possibilities for investors to gauge abnormal returns with strategies related to anomalies. With increasing transparency in the online trading mechanism, such possibilities cease to exist for investors. Moreover, market dynamics have transformed on account of several shocks such as COVID-19, Omicron, Russia–Ukraine, Visa-related international issues in the world over economies and financial markets. Investors and markets have become more cautious and look out for a precautionary approach while dealing in stock market trading.

Banking efficiency, ownership types, and operations: A quasi-natural experiment of conventional and Islamic banks

This study examines the banking efficiency of different ownership types and operations in an emerging market in South Asia. It further explores the moderating effect of Islamic banking operations on such relationships. The effects of banking regulatory developments on banking efficiency are also examined through a quasi-natural experiment approach. Using 533 banking unit observations of banks for FY 2002/2003 to 2017/2018 period, and applying the data envelopment analysis (DEA) method for banking efficiency and Tobit regression, the findings document that the banking efficiency of the state-owned conventional banks outperforms privately-owned domestic banks, as well as conventional domestically owned banks (state-owned and privately-owned banks) outperforms the foreign-owned banks. Again, the banking efficiency outperformance of the conventional banking operation over the Islamic banking operation is found. However, the outperformance of conventional state-owned banks diminishes with the moderation of Islamic banking operations. Additionally, the quasi-natural experiment with difference-in-difference (DID) regression result reveals that the banking efficiency of Islamic banks and conventional state-owned banks has improved during the post-regulatory period and reduced the efficiency gap between them (in favor of conventional banks). However, the banking efficiency of conventional state-owned banks offering Islamic banking services has diminished in the post-regulatory period. These findings remain robust during the global financial crisis (GFC) and non-GFC periods. Overall, the results add a new dimension to the banking efficiency and regulatory development research for the policymakers and regulators in the financial services sector.