Jordanian Banking Sector Research Articles

Empirical insights into business intelligence adoption and decision-making performance during the digital transformation era: Extending the TOE model in the Jordanian banking sector

Organisations have been increasingly adopting decision support and business intelligence (BI). However, there is still considerable academic interest in comprehending the factors that influence the decisions to embrace such technologies. Moreover, the use of BI in developing countries, like Jordan, is remain at an early stage. This study examines the factors that impact the adoption of BI in the banking sector. This research also examines at the impact of BI adoption on decision-making performance in Jordan commerce banks. A conceptual framework was formulated as an extension of the Technology-Organization-Environment (TOE) framework to determine how technological, organizational and environmental factors influence the adoption of business intelligence (BI) in the banking sector. An empirical analysis was conducted with a sample of employees working for Jordanian commercial banks. Hypotheses were analysed through partial least squares structural equation modeling (PLS-SEM) using 251 responses that were obtained from respondents using an administered a questionnaire. The outcomes display a significant positive relationship between the TOE factors and the adoption of BI, which emphasizes their criticality as far as shaping BI adoption in commercial banks is concerned. However, it could be noted that organisational readiness related to one of the organisation’s factors has not been found to affect BI adoption. This suggests that further scrutiny is required on specific organisational aspects that can impact on BI adoption in banking environments. Moreover, the study revealed that the adoption of BI greatly improves decision-making performance. These findings highlight the importance of the Jordanian banking sector embracing a complete approach that incorporates cutting-edge technology solutions, a conducive organisational culture, and adaptability in order to maximise the adoption and use of BI. This report provides significant insights for banks aiming to improve their adoption of BI and perform informed and data based decisions in the continually evolving banking sector. The study provides numerous theoretical and practical contributions, acknowledges its limitations, and offers possibilities for future research.

From innovation to stability: Evaluating the ripple influence of digital payment systems and capital adequacy ratio on a bank’s Z-score

This study investigated the influence of digital payment systems on banks’ stability by exploring their effect on the Z-score of the Jordanian banking sector during the period from 2004 until 2022. It specifically focused on liquidity risks generated from e-payment transactions and how sufficient capital adequacy ratios enhance banking sector stability over both short-term and long-term periods by standing against sudden volatilities yielded from large amounts of transactions executed through digital payment systems. To achieve this objective, the study utilizes time series dual regression analyses of vector autoregression and vector error correction models on E-views 12 to cover the time variation influences of digital payment on the banking sector Z-score. The regression results indicate varied effects between the benefits and risks of digital payment systems on a bank’s Z-score that influence the immediate sector’s stability, indicating that while digital payment systems can initially hold liquidity risks, leading to short-term instability; the strategic implementation of robust capital adequacy ratio stands as a protective buffer by fostering long-term banking sector resilience. The results also suggest future predictions and insights for financial sector legislators and regulators emphasizing the need for monitoring strategies that stimulate continuous innovations in the digital payment infrastructure while constantly ensuring the stability and resilience of the banking sector. Thus, prudent liquidity management and the reinforcement of capital buffers are encouraged to pilot the dual challenges and opportunities that appeared at the stages of the digital payment process, ultimately guiding the sector toward continuous growth and sustainability. AcknowledgmentThe author is grateful to the Middle East University, Amman, Jordan for the financial support granted to cover the publication fee of this research.

Effect of Artificial Intelligence (AI) on Financial Decision-Making: Mediating Role of Financial Technologies (Fin-Tech)

The main objective of the current study is to shed light on the mediating effect of financial technology (Fin-Tech) on the relationship between artificial intelligence (encompassing natural language processing (NLP), machine learning algorithms, computer vision, predictive analytics, robotic process automation (RPA), blockchain technology, and deep learning) and financial decision-making from the perspective of financial managers within Jordan's commercial banking sector. Realizing this objective required the use of quantitative methodology. A questionnaire was self-administered by 86 financial managers in the Jordanian banking sector. Primary data was analyzed using AMOS. Results of analysis confirmed that FinTech plays a significant mediating role between AI applications and financial decision-making. Machine learning was identified as the most impactful AI technique, facilitating more informed decisions through advanced data analysis and pattern recognition beyond the scope of traditional analysis methods. The novelty of current research is in the fact that it offers valuable insights into the intersection of AI and Fin-Tech within the Jordanian financial sector. It contributes to the understanding of how advanced AI techniques can enhance financial decision-making, emphasizing the importance of multidisciplinary expertise in the development of AI-driven financial systems. The findings have significant implications for both theoretical understanding and practical application in the finance industry. Doi: 10.28991/HIJ-2024-05-03-015 Full Text: PDF

Digital Transformation in HRM: Leveraging AI and Big Data for Employee Engagement and Retention

The Jordanian banking sector is now seeing a significant change in the use of artificial intelligence (AI) and big data in human resource management (HRM). To assess the influence of this era on employee engagement and retention, 300 employees of Jordanian bank were the sample of the study. Using partial least squares (PLS) structural equation modeling, we have a look at investigating how pride mediates and organizational culture modifies those effects. The study found a favorable correlation between AI adoption (r = 0.65, p < 0.01) and Big Data use (r = 0.58, p < 0.05) and work satisfaction, organizational culture, savings technology, staff engagement, and positive connections with Jordanian savings banks. Furthermore, regression research demonstrates that AI adoption and usage of Big Data are predictive. AI and big data can optimize HRM practices and provide insights, leading to higher employee satisfaction (r = 0.72, p < 0.01). This can enhance competitive advantage and strategy in the digital age.

Business intelligence competencies and their impact on organizational ambidexterity

In Jordan’s banking sector, organizations face the dual challenge of stability and innovation. Achieving this balance requires a deep grasp of leveraging capabilities for existing opportunities and exploring new ones. The key lies at the intersection of business intelligence and organizational ambidexterity. Therefore, this study has investigated the relationship between business intelligence and organizational ambidexterity within the Jordanian banking sector. It examined the impact of managerial, technical, and cultural competencies of business intelligence on organizational ambidexterity in Jordanian commercial banks listed on the Amman Stock Exchange. The quantitative study involved 449 bank employees. The data were gathered via a questionnaire, and the responses were analyzed using R language version 4.2.2. The results indicated that managerial competencies (z = 8.26, p = 0.000) and technical competencies (z = 4.09, p = 0.000) exhibit statistically significant positive direct effects on organizational ambidexterity. Additionally, cultural competencies were found to have a statistically significant direct effect on organizational ambidexterity (z = 2.083, p = 0.037). Managerial, technical, and cultural business intelligence competencies play crucial roles in the adoption of organizational ambidexterity among Jordanian commercial banks. Achieving organizational ambidexterity necessitates integrating these competencies with organizational capabilities.

The Impact of Digital Marketing Strategies on User-Generated Content (Ugc) in the Jordanian Banking Sector

The Impact of Digital Marketing Strategies on User-Generated Content (Ugc) in the Jordanian Banking Sector

The Impact of Human Resource Management Practices on Organizational Learning at Jordanian Commercial Banks

Organizational learning is a critical element that enables an organization to adapt to changes and remain competitive. It allows corporate team members to continue to advance their professional growth and development. This study aimed to investigate the impact of human resources management practices on organizational learning in Jordanian commercial banks. A quantitative method was employed, and the data was collected from the commercial banking sector in Jordan. A total of 386 questionnaires were collected and subjected to analysis. Based on the results, the results that study suggested the presence of a statistically significant effect at the level of significance (α ≤ 0.05) of human resource management practices in their dimensions (employment, training, motivation, performance evaluation) on organizational learning. The study recommended paying more attention to the hiring process and providing training to new and experienced employees as plans are developed, paying more attention to the hiring process and providing training to new and experienced employees as plans are designed while keeping cross-organizational skills in mind. And pay special attention to the performance evaluation perspective of improving the quality of work.

The Role of Blockchain Technology in Managing Efficiency and Cost Reduction in The Banking Sector in Jordan

The Role of Blockchain Technology in Managing Efficiency and Cost Reduction in The Banking Sector in Jordan

Board gender diversity and bank performance in Jordan

Board diversity is crucial for corporate governance and improves corporate outcomes by aligning management with stakeholders’ interests. Compared to advanced environments, Jordan’s decent sociocultural backdrop exhibits a higher level of gender bias. This study investigates the influence of board gender diversity (BGD) on Jordanian banking sector performance, an under-explored area. This quantitative paper employs Ordinary Least Squares (OLS), random, and fixed-effect approaches to analyze 182 bank-year observations for balanced longitudinal data analysis. These approaches correctly establish the BGD-Tobin’s Q nexus during 2010–2022. The coefficient of determination was 70.57%. The model confirms a positive correlation between BGD and market-based performance indicators. Findings support agency and resource dependency hypotheses, showing BGD’s role in decision-making. Hence, a one-unit increase in BGD causes a 37.2-cent increase in Tobin’s Q measure. Moreover, a one-unit change in board independence, board meetings, size, women’s representation in top management, and capital adequacy ratio, assuming all other factors remain constant, results in Tobin-Q changes of 2.57 cents, 32.8 cents, 5.78 cents, 51.2 cents, 30.55 cents, and 22.86 cents, respectively, and the same direction. The results show how BGD enhances bank performance and contributes to relevant theories. The results are vigorous in a variety of identification and estimation methodologies.

Effect of Business Intelligence, Digital Transformation and Digital Leadership on Employee Satisfaction within the Commercial Banking Sector in Jordan

Effect of Business Intelligence, Digital Transformation and Digital Leadership on Employee Satisfaction within the Commercial Banking Sector in Jordan

The impact of adopting the digital strategy on the competitive advantage: A moderating role of employee satisfaction in the Jordanian banking sector

Digital strategy is one of the methods adopted by organizations to use digital technology to achieve business goals, improve performance, and enhance competitive advantage by significantly improving customer experience. Success in achieving competitive advantage requires implementing the digital strategy effectively. The study aims to determine the impact of adopting the digital strategy on the possession of competitive advantage with the moderating role of employee satisfaction in the Jordanian banking sector. Data were collected from 397 employees working in twelve Jordanian banks. The SPSS software was used to analyze the data and test the hypotheses. The results show that adopting digital strategy dimensions explains 55.6% of the variance of competitive advantage dimensions. Data, quality, and flexibility explain 45.8%, 44.8%, and 47.3% of the variance of competitive advantage, respectively. Also, the results show a positive impact of digital strategy dimensions (technologies, data, human resources, and operations) on competitive advantage dimensions (quality, flexibility, and cost). Moreover, the results also show that employee satisfaction moderates and enhances the relationship between adopting the digital strategy and possessing competitive advantages. The study recommended that decision-makers in commercial banks pay attention to applying digital technology because it enhances the speed and quality of providing services to customers.

Legal frameworks for Implementing Basel Principles III in the Banking Sector in Jordan

The research dealt with the legal frameworks for applying Basel III principles in the banking sector in Jordan, where the focus was on clarifying the principles established by the Basel III Committee and the extent of Jordanian banks’ commitment to implementing them through the corporate governance instructions for Jordanian banks issued by the Central Bank of Jordan and amended in 2023. The importance of the research lies in determining the extent of compatibility of these instructions with the principles of Basel III, the result we reached was that corporate governance instructions were issued to be consistent with the principles of Basel III. Thus, the Central Bank of Jordan contributed effectively to applying international standards to the Jordanian banking sector, and the study recommended modernizing the banking system completely to reach To the highest level of application of Basel III principles, by supporting all principles related to corporate governance within banks by activating their constituent elements, and issuing a special law for corporate governance in addition to the instructions of the Central Bank.

Individual and Technological Factors Affecting the Adoption of AI-Powered Remote Auditing in the Jordanian Banking Sector

IntroductionArtificial intelligence technologies have recently contributed to the field of remote auditing and have led to significant improvements in the efficiency and outcomes of the audit process. However, this professional technological integration remains unexplored in the Jordanian banking sector. Accordingly, understanding the mechanism of integration between these factors is essential to keep pace with the evolving work environment. This study aims to examine how these factors affect the adoption of remote auditing supported by artificial intelligence in Jordanian banks. MethodsA quantitative approach consistent with a cross-sectional design was used to collect primary research data. A structured questionnaire was distributed to 158 decision-makers in various commercial banks in Jordan. The questionnaire measured individual factors (e.g., skill level of users and Attitude towards technology) and technological factors (e.g., technology readiness, data security and privacy, and integration capabilities). Structural equation modeling (SEM) was used to test the relationships between these factors and intention to adopt AI-powered remote auditing using SMART PLS. ResultsThe results depicted that all factors, including individual and technological factors, significantly influenced the adoption of AI-powered remote auditing. Attitude towards technology and integration capabilities were the strongest predictors. Additionally, technology readiness, data security and privacy, and skill level of users had moderate but significant, effects on adoption intention. ConclusionThe findings emphasize that both individual perceptions and technological robustness are crucial for adopting AI-powered remote auditing in Jordanian banks. Improving system reliability and showcasing the benefits of AI tools can significantly boost adoption rates

Individual and technological factors affecting the adoption of enterprise resource planning systems in the Jordanian banking sector

Individual and technological factors affecting the adoption of enterprise resource planning systems in the Jordanian banking sector

The Risks of Using Financial Technology on the Jordanian Islamic Banking Sector

The current study aimed to investigate the impact of the risks associated with the use of financial technology on the Islamic banking sector in Jordan. The researcher adopted a descriptive-analytical approach by referring to previous studies and scientific journals. The researcher developed a study tool, a questionnaire, that was tailored to the study's objectives. The study's population consisted of administrative employees in Islamic banks, numbering approximately 4,094 employees. The study sample was drawn from employees in the northern region of Jordan, with 218 questionnaires distributed and 206 questionnaires returned. After reviewing the questionnaires, it was found that 6 questionnaires were not valid for statistical analysis. Among the study's key findings, there was a statistically significant impact of the risks associated with various types of financial technology (lack of knowledge, operating systems, information security) at a significant level (α≤0.05) on the Islamic banking sector in Jordan. The results also indicated a good level of financial technology application in Islamic banks in Jordan. One of the main recommendations from the study is the necessity to develop banking regulatory and supervisory frameworks to keep pace with advancements in modern financial technology models. This can be achieved by utilizing regulatory technology and striking a balance between promoting competition and financial innovations, while ensuring the stability of the banking sector.

The relationship between profitability and cash flow in Jordanian banks

The relevance of this study lies in the importance of the two variables – profitability and cash flow – for the financial performance of banks, as well as the unique characteristics of the Jordanian banking sector. The purpose of the study is to investigate whether there is a significant relationship between profitability and cash flow in Jordanian banks and to identify potential factors that influence this relationship. The study methods are to employ a quantitative research method, using financial data from Jordanian banks over a period (2008–2019), Granger causality tests are used to describe the link between cash flow and profitability. The study results show a significant link between profitability and cash flow in Jordanian banks. Specifically, the study finds that a one percent increase in cash flow results in a 0.27 percent increase in profitability. The Adj-R2 for the three cash flow models is 11.4%, 17.3%, and 20.4%, respectively. Conversely, the Adj-R2 for the three models’ earnings are 21.4%, 21.5%, and 22.3%, respectively. However, the magnitude of the link seems to be weaker in Jordanian banks compared to banks in other countries. The study concludes that cash flow from operating is an important factor in improving the profitability of Jordanian banks.

التكلفة التاريخية مقابل القيمة العادلة وتأثيرها على جودة الأرباح

The controversy has increased recently between supporters of the historical cost model and supporters of the fair value model as a basis for measurement in accounting, by comparing the priorities of the characteristics that should be available in the accounting information. Since the accuracy and validity of this information depends on the validity, appropriateness, and reliability of the measurement alternatives on which it was based to access this information. In this research, we will address the two accounting alternatives, the historical cost, and the fair value, and compare the impact of each on the quality of profits in the Jordanian banking sector. The historical cost that represents the actual reality of the event at the time of its occurrence at the moment of exchange is undoubtedly correct or accurate at the moment of acquisition or ownership, but the recorded value may become a thing of the past as it deviates slightly or a lot from the current value. The results of the field study indicated that fair value provides information that is highly suitable for decision-making and is comparable to accounting information in the Jordanian banking sector.

The Determinants of Capital Adequacy in the Jordanian Banking Sector: An Autoregressive Distributed Lag-Bound Testing Approach

The current study aims to examine the determinants of the capital adequacy ratio (CAR) in the context of Jordanian banks through a literature review and analysis of empirical evidence. The aggregate data were obtained from Globaleconomy.com, the Financial Soundness Indicators, the Central Bank of Jordan, and World Bank Data covering the period from 2003 to 2021. The aggregate data were analyzed using autoregressive distributed lag (ARDL), utilizing Econometric Views (EViews) software. The empirical results suggest a short-run causality relationship running from banks’ credit-to-deposits ratio, banks’ leverage ratio, banks’ liquidity ratio, and one-year-lagged ROE to the CAR. The results also suggest the existence of short-run causality running from the capital-to-assets ratio, one-year-lagged capital-to-asset ratio, liquid-assets-to-deposits ratio, and coverage ratio to CAR. In addition, the results show the leverage ratio and liquidity ratio as having positive long-run associations with CAR. A positive and significant long-run association was also found between CAR, on the one hand, and the capital-to-assets ratio and the liquid assets to deposits ratio; the coverage ratio, on the other hand, showed a negative and statistically significant long-run association with CAR. The pairwise Granger causality test results reveal that liquid asset to deposits, money supply, profitability, and the capital-to-assets ratio Granger cause CAR. The study findings emphasize the importance of understanding the factors impacting CAR, the direction of the influence, the magnitude of the influence of the determinants of CAR in emerging economies such as Jordan and taking appropriate measures to safeguard the stability and resilience of the banking industry.

The Role of the Banking Sector in Increasing Investment and Credit Facilities: The Case of Jordan

This research explored the role of the banking sector in increasing investment and credit facilities, focusing on the case of Jordan. The descriptive, analytical, and quantitative approaches were adopted by the researcher. The study’s data samples represent the banking sector in Jordan as data was collected from reports issued by the Central Bank of Jordan (CBJ) from 2017 to 2021. The article showcases that the banking sector plays an important role in supporting investments in Jordan and that specifically, the banking sector in Jordan plays a critical role in offering credit facilities during the period studied. The researcher recommends that further research must be conducted to explore in detail the crucial role of the Jordanian banking sector in supporting investments.

The Mediating Role of Organizational Culture for the Relationship Between Internal Social Responsibility and Intellectual Capital

Purpose: The objective of this study was investigate the effect of internal corporate social responsibility on intellectual capital and testing the moderate effect of organizational culture between the dependent and independent variables in the Jordanian banking sector. Theoretical framework: Internal corporate social responsibility(ICSR) ,Intellectual capital (IC), and organizational culture (OC) are usually considered three crucial pillars to increase firms’ performance in the urban world. Nevertheless, in Arabian countries such as Jordan, these pillars have not received adequate consideration from specialists. Design/methodology/approach: The researcher designed a questionnaire based on the objectives and hypotheses of the study. The researcher distributed 350 questionnaires. 336 questionnaires have been retrieved. SPSS and Smart PLS 4was used to analyze the collected data and test the hypotheses. Findings: Study results showed a positive and significant correlation between Internal corporate social responsibility and intellectual capital , from the standpoint of managers in Jordanian Banking sector. Organizational culture plays a moderating role in the relationship between Internal corporate social responsibility and intellectual capital. Research, Practical & Social implications: Some managerial implications for bank managers in Jordanian banking sector have emerged based on the findings of this study. Originality/value: As far as the author is aware, this is the first empirical study conducted to examine the interrelationship between internal corporate social responsibility, organizational culture and intellectual capital, and their combined effects Arabian countries such as Jordan.