Iranian Banking Industry Research Articles

Marketing strategies evaluation based on big data analysis: a CLUSTERING-MCDM approach

Nowadays, a huge amount of data is generated due to rapid Information and Communication Technology development. In this paper, a digital banking strategy has been suggested applying these big data for Iranian banking industry. This strategy would guide Iranian banks to analyse and distinguish customers’ needs to offer services proportionate to their manner. In this research, the balances of more than 2,600,000 accounts over 400 weeks are computed in a bank. These accounts are clustered based on justified RFM parameters containing maximum balances, the most number of maximum balances and the last week number with the maximum balance using k-means method. Subsequently, the clusters are prioritised employing Best Worst Method- COmplex PRoportional ASsessment methods considering the diverse inner value of each cluster. The accounts are classified into six clusters. The experts named the clusters as special, loyal, silver- high interaction, silver- low interaction, bronze, averted- low interaction. silver- low interaction cluster and loyal cluster are picked in order by experts and BWM-COPRAS as the most influential clusters and the digital banking strategy is developed for them. RFM parameters are modelled for customers’ accounts singly. The aggregation of the separate accounts of a customer should be considered.

Measuring Market Power in the Iranian Banking Industry According to the Boone Efficient-based Approach

The main objective of this paper is to evaluate the structure of the Iranian banking system and to measure the market power factor based on the Boone approach. In this paper, we investigated the Iranian organized money market, including 18 banks operating in the period of 2008-2015. To calculate the marginal cost (MC), we used a Translog Stochastic Frontier Cost Function. Findings based on the Boone approach confirm that the size of efficient-based competition is low in Iranian organized money market. Based on the Boone index, this value in the Iranian banking market equals -0.022, and Bank Melli and Bank Mellat due to having high marginal cost elasticity with respect to market share, have a higher power in market transformations and distortion of market structure towards monopoly. In contrast, Karafarin Bank, Post Bank, Sarmayeh, and Sina Bank have produced the least distortion in market structure.

The Theory and Practice of IT Governance Maturity and Strategies Alignment

Information technology (IT) is considered as a major and strategic part in development of banks business, and banks using IT as a competitive advantage. Nowadays IT governance is as a constituent part of governance in banks. Key role of information and communication technology (ICT) in bank growth and development is obvious to top managers, but what needs to be considered carefully is the alignment of business strategies with IT strategies. This article intends to investigate the significant differences of IT governance maturity among the Iranian Banking Industry (publicly-owned and privately-owned). To achieve these implications, an IT governance framework and COBIT 4.1 were employed, using data from 17 large publicly-owned and privately-owned banks. The results indicate that privately-owned banks have a higher maturity rank in alignment of business strategies with IT strategies compared to publicly-owned banks.

Exploring the relationship between corporate social responsibility, brand image and brand equity in Iranian banking industry

PurposeThe purpose of this research is to explore the relationship between corporate social responsibility (CSR), brand image (BI) and brand equity (BE) in the banking industry of the Islamic Republic of Iran.Design/methodology/approachUsing the deductive approach as the methodology and 213 valid questionnaires returned by customers of Iranian banks in four big cities of Iran, this study tests the relationship between CSR, BI and BE in eight hypotheses. The data were analyzed by the partial least squares method.FindingsThe results of this research show that CSR has a significant direct effect on BI. Also, BI has a significant direct effect on BE.Originality/valueThis research provides valuable insight for studying the relationship between CSR, BI and BE. The results of this study provide a better understanding of the role of CSR in customers’ attitudes and behaviors in the banking industry.

Factors of Non-Conformity Behavior and the Emergence of a Ponzi Game in the Riba-Free (Interest-Free) Banking System of Iran

Factors of Non-Conformity Behavior and the Emergence of a Ponzi Game in the Riba-Free (Interest-Free) Banking System of Iran

Providing a model for preventing administrative corruption in the banking system

In the past few years, an excessive number of administrative violations and deviations have been reported within the Iran banking systems and sanctions by foreign countries, have led to new deviances in the banking system of Iran. Researchers tried to identify a model, for reducing and preventing deviations, in the administration of banking system. After reviewing the literature and views on administrative deviances, variables affecting the administrative deviances in the banking system, were identified by holding in-presence meetings with experts. The affecting factors were lack of independent and professional central bank, senior managers who were experts and accountable to banking system, the systemic monitoring mechanisms, integrated data systems, reformation of the public administration in banking system, social capital and media. 108 questions of the questionnaire were answered by experts in monitoring, legal, and credit areas of specified banks. The results indicated that the variables did have an impact on reducing and preventing administrative deviance in the banking system.

Designing a Model for Implementation of Business Intelligence in the Banking Industry

Numerous researches have been carried out on implementation and employment of business intelligence, but in the past researches only specific aspects and dimensions have been studied while factors affecting implementation process and interactions between them are not widely considered. In such circumstances, it is vital to identify key factors affecting business intelligence implementation process and determine communication structures between these factors. In the present article, reviewing the related literature and obtaining experts' opinions using fuzzy Delphi techniques is first, followed by key factors affecting the process of business intelligence implementation and important criteria of effectiveness for business intelligence in the Iranian banking industry were identified, and then using a method of interpretive structural modeling, relationships between factors were determined and analyzed. Finally, the interactive structure of the factors, i.e. business intelligence implementation, a model is presented. Using confirmatory factor analysis and path analysis methods, model validation was conducted. Leading to the determination that while that transition for some companies has been attempted, not all current efforts have been successful.

Impact of economic sanctions on access to noncommunicable diseases medicines in the Islamic Republic of Iran

It has been argued that economic sanctions and the economic crisis have adversely affected access to drugs. To assess the impact of economic sanctions on the Iranian banking system in 2011 and Central Bank in 2012 on access to and use of drugs for noncommunicable diseases (NCDs). An interrupted time series study assessed the effects of sanctions on drugs for diabetes (5 drug groups), asthma (5 drug groups), cancer (14 drugs) and multiple sclerosis (2 drugs). We extracted data from national reference databases on the list of drugs on the Iranian pharmaceutical market before 2011 for each selected NCD and their monthly sales. For cancer drugs, we used stratified random sampling by volume and value of sales, and source of supply (domestic or imported). Data were analysed monthly from 2008 to 2013. Market availability of 13 of 26 drugs was significantly reduced. Ten other drugs showed nonsignificant reductions in their market availability. Interferon α2b usage reduced from 0.014 defined daily doses per 1000 inhabitants per day (DID) in 2010 to 0.008 in 2013; and cytarabine from 1.40 mg per 1000 population per day in 2010 to 0.96 in 2013. Selective β2-adrenoreceptor agonists usage reduced from 8.4 to 6.8 DID in the same time period. There is strong evidence that sanctions have had a negative effect on access to drugs, particularly those that depended on the import of their raw material or finished products.

How companies succeed and fail to succeed with the implementation of intelligence systems

Most papers in this issue deal with different sides of technological systems and managerial practices usedfor intelligence work in private organizations. Empirical data from a number of countries and companiesare gathered to illustrate how companies work and fail to work with business intelligence and competitiveintelligence in organizations.The paper by Rezaie, Mirabedini and Abtahi entitled “Identifying key effective factors on theimplementation process of business intelligence in the banking industry of Iran” identifies key effectivefactors on the implementation process of business intelligence. Thirty-nine factors were identified andclassified in nine main groups, including organizational, human, data quality, environmental, systemability, strategic, service quality, technical infrastructure, and managerial factors.The paper by Bisson and Gurpinar entitled “A Bayesian approach to developing a strategic earlywarning system for the French milk market” suggests a new strategic early warning system forcompanies and public organizations to better anticipate market changes and make more robust decisions.The paper by Al Rashdi and Nair entitled “A business intelligence framework for Sultan QaboosUniversity: A case study in the Middle East” aims to build a customized business intelligence (BI)framework for Sultan Qaboos University (SQU). A prototype is tested with good results.The paper by Søilen, Tontini, Aagerup and Andersson entitled “The perception of usefulinformation derived from Twitter: A survey of professionals” is a survey of professionals about the valueof the information or intelligence on Twitter. It shows that Twitter is perceived as a service for usefulinformation but not for the reason one may expect, not because the content of the tweets gives valuableinformation, but because of what can be derived and extracted from the information that is being tweetedand not tweeted.The paper by Calof, Richards and Santilli entitled “Insight through open intelligence” is anopinion piece that gives suggestions of how to broaden the CI field with the help of open innovation.

Identifying key effective factors on the implementation process of business intelligence in the banking industry of Iran

Though many organizations have turned to developing and using businessintelligence systems, not all have been successful in implementing such systems. These systemshave social-technical dimensions with many elements and are very complicated. Numerousstudies have been carried out on implementation and employment of business intelligence, butin the past studies only specific aspects and dimensions have been addressed. The aim of thisstudy is to identify key factors in the implementation process of business intelligence in theIranian banking industry. The present research is objectively applied as a survey study inimplementation strategy. Also it is a descriptive study in terms of the research plan and datacollection where two documentary and field study methods have been used for collecting data.The statistical population of this study comprises experts and professionals in informationtechnology who are active in implementing solutions for business intelligence in the bankingindustry of Iran. In this study, 16 people were chosen based on non-random judgment samplingcombined with targeted and snowball sampling as a statistical sample and their viewpointswere extracted and refined using the Fuzzy Delphi Technique. First through studying pastresearch records and reviewing literature of effective factors in implementing businessintelligence process, 37 factors were identified. Then by implementing five rounds of the FuzzyDelphi Technique, 39 factors were confirmed as significant among 37 factors affecting thebusiness intelligence implementation process in past studies and 10 factors proposed by experts.Also, these 39 factors were classified in nine main groups including organizational, human, dataquality, environmental, system ability, strategic, service quality, technical infrastructure, andmanagerial factors. Managers and executives of business intelligence projects in Iran's bankingindustry can achieve the given objectives and results by considering such significant factors inplanning and taking measures related to effective implementation of business intelligence.

Corporate foresight and its effect on innovation, strategic decision making and organizational performance (case study: Iranian banking industry)

PurposeThis paper aims to examine the capability of corporate foresight in the organizations and its impacts on innovation, quality of managers’ strategic decision-making and organizational performance in the banking industry of Iran.Design/methodology/approachIn the first part, upon introducing corporate foresight from the two process and content perspectives, influential elements in this construct are discussed. Then, corporate foresight’s relationship with innovation and strategic decision-making is examined and its effect on organizational performance is analyzed within a structural model. Using interview and questionnaire, the data research were collected from the banking industry of Iran including 30 banks (state-commercial banks, specialist-state banks, interest-free loan funds and private banks). Through descriptive, inferential statistical analyses and structural equation modeling using SPSS and Smart PLS software, reliability of the measurement model with 576 samples was confirmed.FindingsThe results show that the corporate foresight playing three roles of initiator, strategist, and opponent affects the innovation. Moreover, the research results suggest that using the data from the foresight and identifying the weak signals, we can reduce the uncertainty and issue prior warnings in order to enhance the quality of manager’s strategic decision making and promote the organizational performance.Originality/valueThis paper is one of the articles from the sources of the doctoral thesis of Futures Studies as “The relationship between knowledge absorption capacity, corporate foresight and its effect on the performance of the banking industry in Iran”.

Cost Efficiency Measurement in Data Envelopment Analysis with Dynamic Network Structures: A Relational Model

The “Dynamic-network” version of cost efficiency measurement in Data Envelopment Analysis (DEA) is proposed in this paper. The classical DEA models ignore operations of individual processes within a system; moreover, they compute efficiency at the same time. Therefore, we suggest a relational model to estimate cost efficiency in static network structures. Also, we incorporate the dynamic effect in network structures. The proposed models here evaluate the overall efficiency over the whole periods and indicate it as a weighted average of period efficiencies. The main advantage revealed in this study is recognition of: which divisions at what periods caused the inefficiency of the system, the internal activities of the system over time, considered; moreover, the results obtained here is applicable in, improving the performance of the system. A case study of Iranian banking industry is used to show the applicability of the approach.

Perceived Possibility of Disclosure and Ethical Decision Making in an Information Technology Context

To date, substantial research studies have been conducted in the field of ethical decision making in many disciplines. However, ethical efforts in the context of information technology have been limited. In this research, a focus has been put on modeling ethical decision making in cyberspace with emphasis on business intelligence scenarios. The model is comprised of six exogenous and two endogenous constructs, among them seven were delicately selected from valid and empirically tested ethical models and the eighth one is developed by the authors. After pre-testing the model by experts, reliability, convergent and discriminant validities were approved. Data were collected from 188 IT personnel in the banking industry of Iran. Results revealed that the perceived importance of an IT ethical issue, ethical judgment, ethical obligation, perceived possibility of disclosure, ego strength, and locus of control directly impact ethical intention. However, no impact from law on ethical obligation and codes of ethics on ethical intention was observed. As shown, a higher possibility on acting unethically occurs when the person feels confident that his/her actions will go unnoticed.

Performance Evaluation of Iranian Banking Industry through CAMELS Framework

This research performs an empirical study on the performance evaluation of Iranian banking industry through CAMELS framework. The research method is applied in terms of objective, and correlational according to the type of method. Time domain of research is from 2007 to 2015. The research data are annually collected and extracted from financial statements of operating banks in the Iranian banking industry. Pooled and Panel hybrid regression model with fixed effects are used to analyze the research data and test the hypotheses. Based on the results of research model, the impact of capital adequacy, asset quality, management quality, liquidity quality, and sensitivity to market risk indicators is direct and significant on the return on assets of banks in the Iranian banking industry, but the effect of earnings quality is rejected on the return on assets of banks in the Iranian banking industry.

Do regulators pay attention? An assessment of IT governance implementation in systemically important banks

The large size and complexity of Information Technology systems in systematically important banks raise the need for creating an IT governance architecture that could make IT strategy aligned with business strategy and delivers value while it effectively identifies and manages IT risk. This study traces the links between IT governance and two more applied risk management frameworks, COSO and BCBS’s principles for managing IT risk. Then it argues due to the magnitude of potential losses caused by any weakness in IT governance in D-SIBs, the assessment of IT governance in these banks should be one of the main concerns of local regulators and supervisors. As a case study, it assesses the relative rank of D-SIBs in Iranian banking system to see where these banks would stand in an ordered list of the banks including both private and public banks in terms of IT governance implementation. The application of the Fuzzy AHP technique shows that IT governance practice in Iranian D-SIBs is not as good as the private banks while it outperforms some state-owned banks.

Procyclicality and The Intensity of Basel III Measures in Islamic Banking: Some Evidence from Iran

In response to the recent financial crisis, Basel III has introduced major reforms to the regulatory framework for banks in order to decrease procyclicality of the financial sector and its vulnerabilities. This paper studies the procyclical behavior of Iranian banking system which is fully Islamic and comprises of two types of banks, namely Commercial Banks and Specialized Banks. Using macroeconomic and financial data for specialized and commercial Islamic banks in Iran over the 2004-2014 period, the results of panel model estimations indicate that specialized banks inclined towards PLS contracts are less procyclical than commercial Islamic banks inclined towards mark-up contracts. The results imply that bank procyclicality is rooted more in mark-up contracts compared to PLS contracts. Therefore, to decrease the degree of procyclicality in the financial sector, Iranian commercial banks should be subject to tougher prudential measures compared with specialized banks. The results suggest that extending the share of specialized banks in the banking system increases the stability of the financial sector and promotes the ideal version of Islamic finance in practice.

Consumption Smoothing and Borrowing Constraints: Evidence from Household Surveys of Iran

We use Iranian Household Expenditure and Income Survey, to analyze the dynamics of consumption of the households. We observe evidence of excess sensitivity in a cohort pseudo panel of Iranian households. Excess sensitivity, however, is absent for government employees who have better access to finance due to the structure of labor market and banking system in Iran. Our results support the idea that borrowing constraints is the main cause for evidence of excess sensitivity. This indicates that actual consumption prole is sub-optimal and hence deepening financial access will decrease the welfare loss of this sub-optimality. In the paper, we have also provided estimates of elasticity of inter-temporal substitution for the Iranian households for the first time, and they are consistent with those of other developing countries.

Entrepreneurship Network and Microfinance

Banks and financial intermediaries, as the highways of financing and absorption of savings, are considered as the key players in promotion of welfare level in each society. In Iran, due to structural deficiencies and international sanctions, a revision of banking industry seems very essential. More specifically, via balancing of financial intermediaries (based on the notion of “resilient economy’s five-year vision coined by the supreme leader of Islamic Revolution in Iran), banks could be used as a tool for economic promotion as well as one of the basic means of resilient economy. This study introduces the structure of the banking industry in Iran and demonstrates its deficiencies. In this respect, a plan for the structure of financial intermediaries is suggested for three purposes: facilitation of financing, reduction of transaction costs, and enhancement of the welfare level in society. In this regard, a structure based on the entrepreneurial networks through utilizing of measurement, consultancy, and monitoring systems is planned in this study. Furthermore, this study seeks to reduce the credit default risk through increasing of the micro-insurance share to the traditional systems of the financing.

EVALUATE THE INTERNAL AND EXTERNAL FACTORS AFFECTING NON-CURRENT DEMANDS OF BANKS

This study examines the most influential creating causes of non-current receivables of banks in Iran that include inter-organizational factors and extra-organizational factors. can be named the Return on Assets as the most challenging inter-organizational factors that is one of the indicators that shows profitability of banks and its increasing is along with upward of non-performing loans in the banking industry attest to the participation of banks in non-productive or entrepreneurial economic activities. Also, the real interest rate can be named as important extra-organizational factors that due to different and sometimes conflicting views of those involved in the economy in recent years have been a lot of changes. In this study a dynamic panel model for a sample includes 15 banks in the country has been used to investigate the factors influencing the dependent variable (non-current receivables) during the time from 2013 to 2002. The results of this study indicate that precautionary behavior, concentration and rate of return on assets, ie, inter-organizational factors and growth rates, the housing index and real interest rate Among extra-organizational factors, decisive and significant variables in explaining the behavior of non-performing loans in Iran's banking system.

Customer classification in banking system of Iran based on the credit risk model using multi-criteria decision-making models

Article history: Received December 5, 2015 Received in revised format February 16 2016 Accepted March 12 2016 Available online March 14 2016 One of the most important factors of survival of financial institutes and banks in the current competitive markets is to create balance and equality among resources and consumptions as well as to keep the health of money circulation in these institutes. According to the experiences obtained from recent financial crises in the world. The lack of appropriate management of the demands of banks and financial institutions can be considered as one of the main factors of occurrence of this crisis. The objective of the present study is to identify and classify customers according to credit risk and decisions of predictive models. The present research is a survey research employing field study in terms of the data collection method. The method of collecting theoretical framework was library research and the data were collected by two ways of data of a questionnaire and real customers’ financial data. To analyze the data of the questionnaire, analytical hierarchy process and to analyze real customers’ financial data, the TOPSIS method were employed. The population of the study included files of real customers in one of the branches of RefahKargaran Bank in city of Tabriz, Iran. From among 800 files, 140 files were completed and using Morgan’s table, 103 files were investigated. The final model was presented and with 95% of probability, if the next customer’s data is entered the model, it will capable of identifying accurately the degree of customer risk. Growing Science Ltd. All rights reserved. 6 © 201