Remote Banking Research Articles

TRANSFORMING CUSTOMER RETENTION IN FINTECH INDUSTRY THROUGH PREDICTIVE ANALYTICS AND MACHINE LEARNING

In recent years, the fintech industry has experienced rapid growth, driven by technological advancements and evolving consumer expectations. Fintech companies offer innovative financial services, such as digital banking, investment platforms, and payment solutions, catering to the needs of a tech-savvy customer base. However, as competition intensifies, customer retention has emerged as a critical challenge for these companies. According to a study by Ransom (2021), acquiring a new customer can cost five times more than retaining an existing one, making it imperative for fintech organizations to focus on strategies that enhance customer loyalty. The financial technology (fintech) sector has experienced unprecedented growth in recent years, fundamentally transforming how individuals and businesses access and manage financial services. Characterized by the integration of technology with financial services, fintech encompasses a wide array of offerings, including digital banking, peer-to-peer lending, robo-advisory services, and payment processing. As of 2023, the global fintech market was valued at approximately $309 billion and is projected to reach around $1.5 trillion by 2030, according to a report by Fortune Business Insights. This remarkable growth is largely attributed to advancements in digital technology, increasing smartphone penetration, and a growing consumer preference for online financial solutions. Moreover, the COVID-19 pandemic accelerated the adoption of digital financial services, as consumers sought contactless transactions and remote banking options.

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.

TRANSFORMING CUSTOMER RETENTION IN FINTECH INDUSTRY THROUGH PREDICTIVE ANALYTICS AND MACHINE LEARNING

In recent years, the fintech industry has experienced rapid growth, driven by technological advancements and evolving consumer expectations. Fintech companies offer innovative financial services, such as digital banking, investment platforms, and payment solutions, catering to the needs of a tech-savvy customer base. However, as competition intensifies, customer retention has emerged as a critical challenge for these companies. According to a study by Ransom (2021), acquiring a new customer can cost five times more than retaining an existing one, making it imperative for fintech organizations to focus on strategies that enhance customer loyalty. The financial technology (fintech) sector has experienced unprecedented growth in recent years, fundamentally transforming how individuals and businesses access and manage financial services. Characterized by the integration of technology with financial services, fintech encompasses a wide array of offerings, including digital banking, peer-to-peer lending, robo-advisory services, and payment processing. As of 2023, the global fintech market was valued at approximately $309 billion and is projected to reach around $1.5 trillion by 2030, according to a report by Fortune Business Insights. This remarkable growth is largely attributed to advancements in digital technology, increasing smartphone penetration, and a growing consumer preference for online financial solutions. Moreover, the COVID-19 pandemic accelerated the adoption of digital financial services, as consumers sought contactless transactions and remote banking options.

Banking-as-a-service? American and European G-SIBs performance

PurposeThe purpose of this study is to investigate how the implementation of digital banking services (mobile applications) by globally systemically important banks (G-SIBs) affects banks’ performance in the USA and Europe from 2005 to 2022.Design/methodology/approachThe study employs advanced econometric methods to analyze the link between deposits and banking performance, utilizing linear regressions and multivariate Bayesian regressions.FindingsOur results indicate that customer deposits positively impact a bank’s performance after the introduction of the mobile application feature of check deposits, whereas social risk negatively impacts banking financial performance. These findings support the hypothesis that technology implementation improves the profitability and growth of traditional banks.Research limitations/implicationsWhile findings are robust econometrically in linear and Bayesian regressions, variables reflecting the digitalization of banks remain limited. For instance, the number of mobile users or the volume of digital transactions per bank since the implementation of the mobile app is not available.Practical implicationsIn a rapidly growing technology and constantly changing customers behaviors, this research has practical implications from bankers’ perspective to continue the technological innovation efforts and from regulators’ perspective to strengthen requirements for the digital banking services.Social implicationsWe provide empirical evidence that including a banking app for smartphones’ users for remote banking services benefit the financial performance of banks. However, the social risk remains significant for banks in terms of customers' satisfaction, data privacy and cybersecurity.Originality/valueThis paper employs an innovative approach to create a mobile app “discriminatory” factor and examine the relationship between deposits and banks’ performance before and after the introduction of a mobile app for too-big-to-fail banks in Europe and the USA. Additionally, we consider the social risk component of the ESG score, as a bank’s decision to implement mobile applications and technology for its customers potentially affects social risks associated with customer satisfaction and technology usability.

‘Authorized Push Payment’ Bank Fraud: What Does an Effective Regulatory Response Look Like?

ABSTRACT Authorized Push Payment (APP) fraud occurs where bank customers are tricked into transferring money from their account. As this article shows, this type of fraud is a growing threat, catalysed by the rise of remote banking. However, long-standing legal and regulatory rules leave most victims without a route to redress, as recently confirmed by the UK Supreme Court’s 2023 decision in Philipp v Barclays. Through this lens, the article examines a new and ‘world first’ UK regulatory response, which includes a mandatory reimbursement scheme for APP fraud victims in certain circumstances. The article finds that the UK’s new loss allocation scheme is valuable, but also that its specific coverage is problematic given the broad nature of this threat. Overall, the article argues that the priority for UK regulators should be to develop a more ‘joined-up’ response to APP fraud, and it offers generally applicable insights into effective regulatory responses to this evolving threat.

Тренд на цифровизацию финансового сектора как причина модификации банковского законодательства

The digital transformation of the financial sector has become a prominent feature of recent years, driven by various factors ranging from technological advancements to geopolitical developments. This study explores the implications of this trend on banking legislation and regulatory frameworks. The main vector of development in the banking sector over the past three years has been the active implementation of digital technologies. This article examines the reasons behind this digital boom. The study identifies the pandemic-induced shift towards remote banking services as a catalyst for the adoption of digital technologies in the financial sector. Subsequent changes in the geopolitical situation, including the imposition of numerous sanctions against Russia, such as disconnection from international payment systems and the suspension of foreign banking services, necessitated the urgent development and implementation of domestic alternatives. Naturally, all the changes taking place had to take place within the framework of the current banking legislation, which is being promptly modified. While most of the initial challenges stemming from the influence of other countries have been overcome, there remains a need to address issues related to the new industrialization, the application of advanced technologies, and the promotion of economic development in Russia. In conclusion, the trend towards digitization in the financial sector has prompted modifications to banking legislation to accommodate evolving technological and geopolitical dynamics. By embracing digital technologies and adapting regulatory frameworks accordingly, financial institutions can better meet the needs of customers and navigate the complexities of the digital age.

DIGITAL TRANSFORMATION IN FINANCIAL SERVICES: OVERVIEW OF BEFORE AND AFTER THE PANDEMIC

This research examines the significant impact of digital transformation on the financial services sector, focusing on evolutionary changes that occurred before and during the worldwide pandemic. The core goals are to assess the scope of digital transformation in financial institutions, identify important obstacles and possibilities, and examine the techniques used to manage the changing landscape. Data were gathered from a varied group of financial institutions to ensure a complete picture of the sector. The findings show a large increase in digital use before the pandemic, with the pandemic acting as a catalyst for digital activities. Data-driven methods were critical for improving client experiences, increasing operational efficiency, and resolving cyber security issues. The conversation focuses on the industry's resilience in the face of enormous shocks, highlighting the vital role of technology in crisis management. Significant results include a growth in remote banking services, a greater dependence on artificial intelligence for fraud detection, and the adoption of cloud-based solutions for scalability. These findings illustrate the revolutionary impact of digital technology in altering the financial services industry. This comprehensive overview contributes to our understanding of the dynamic relationship between digital transformation and the financial services sector, providing valuable insights for industry stakeholders, policymakers, and researchers. Key Words: World Pandemic, Operational efficiency, Financial Institutions, Stakeholders, Artificial Intelligence

Дистанционное банковское обслуживание (ДБО): проблемы правового регулирования

в данной статье раскрываются актуальные вопросы и правовые проблемы, связанные с использованием и применением дистанционного банковского обслуживания (далее по тексту – ДБО). Уделено отдельное внимание анализу судебной практики по указанной теме. На основе полученных результатов были обозначены такие дискуссионные проблемы как: отсутствие должного правового регулирования (в особенности в части существующих коллизий правовых норм; отсутствия способов правовой защиты для «слабой» стороны договора (клиента)); стремительное увеличение числа мошеннических схем с использованием инструментов ДБО; низкий уровень осведомленности населения о возможных угрозах и другие. Кроме того, были предложены пути решений для устранения вышеизложенных недостатков, связанных с применением системы дистанционного банковского обслуживания во многих структурах общественной жизни. this article reveals current issues and legal problems related to the use and application of remote banking services (hereinafter referred to as RBS). Special attention is paid to the analysis of judicial practice on this topic. Based on the results obtained, such debatable problems were identified as: lack of proper legal regulation (especially in terms of existing conflicts of laws; lack of methods of legal protection for the “weak” party to the contract (client)); a rapid increase in the number of fraudulent schemes using remote banking tools; low level of public awareness of possible threats and others. In addition, solutions were proposed to eliminate the above-mentioned shortcomings associated with the use of a remote banking system in many structures of public life.

A Digital Ruble Platform as an Object of Financial and Legal Regulation

The paper examines the issues of legal regulation of a digital ruble platform, which is considered as an element of the national payment system, information system, and a set of financial technologies. The author analyzes the legal nature of the information platform as a general concept for varieties of digital platforms. The conclusion is made about the need to consolidate the legislative definition of the information platform. The paper also examines the legal status of the platform operator, platform participant and platform users. It is concluded that the platform operator has a special functional function, since he is solely responsible for any processes related to the operation of the digital ruble platform. The author also focuses on the problem of blocking remote banking services due to non-compliance with legislation on combating money laundering and terrorist financing (AML/CFT). It is assumed that the judicial practice concerning challenging the blocking of remote banking services will not change due to the introduction of the digital form of the national currency. It is pointed out that there are no agreements on interaction between the Bank of Russia and Rosfinmonitoring in terms of control measures under AML/CFT in the circulation of the digital form of the national currency, since the relevant risks have not been examined. It is concluded that cross-border money transfers in the form of digital national currencies are promising, but the author determines a number of problems related to the technical feasibility and legal regulation of the processes of opening accounts for non-residents and transferring funds.

The good bank: preference of banking institutions based on perceptions of corporate environmental and social causes

IntroductionThis study aims to contribute to understanding factors that explain consumers' preferences for banking institutions. We specifically explored the roles of Corporate Social Responsibility (CSR)—targeted primarily at Environmental causes and secondarily at Social causes—on corporate image (CI), consumer satisfaction (CS) and consumer loyalty (CL). We tested whether integrating a CSR description with an emphasis on environmental causes into the bank marketing strategy would positively affect CI, CS and CL. We also inspected the effect of online banking vs. direct human contact, and perception of price fairness, as well as that of the consumers' demographic variables.MethodsA survey was carried out online, with 322 international respondents recruited through social networks. Participants were randomly directed to one of eight different bank conditions, each combining descriptions where Environmental and social CSR, Price fairness, and direct human contact with the clients varied. After reading the bank description participants filled out a questionnaire that addressed their perception of the bank's CI and their projections of CS and CL.Results and discussionResults indicated that participants favored the banks that included CSR as part of their description, with the perception of price fairness being the second critical factor in the respondents' CI, CS, and CL. Direct human contact vs. remote banking did not play a role in the participant's ratings of the bank, which is in line with more current studies. We concluded that businesses in the banking sector enhance their global reputation when investing in environmental and social CSR.

DIRECTIONS FOR IMPROVING REMOTE BANKING SERVICES IN COMMERCIAL BANKS

The article discusses ways to improve remote banking services in commercial banks. In particular, the analysis of factors influencing the provision of remote banking services by banks was carried out, directions for improving remote banking services based on individual author's approaches were studied, and relevant scientific proposals and practical recommendationswere developed.

Цифровізація банківського сервісу як стратегічний напрям розвитку для ощадних банків

Introduction. Digital means of expanding access to financial services are currently one of the promising tools for solving important socio-economic problems and stimulating economic development. The coronavirus pandemic gave a powerful impetus to the spread of digital banking. After the decline in morbidity and the relaxation of the quarantine, activity in the use of digital channels by customers of almost all segments has remained. Problem Statement. The relevance of the study is due to the global trend to replace the branch network with a remote service in order to reduce operating costs (increase operational efficiency) provided that customers' needs for reliable, fast and cheap services are met. The purpose is to determine the potential of digitalization of the delivery channels of banking products and services for savings banks in the conditions of the latest technologies and systemic stresses. Methods. The methodology of comparative analysis, system analysis, correlation of historical data, scientific synthesis was used. The research was conducted using the methods of statistical analysis of series dynamics and factor analysis of data. Content analysis was used in the review of scientific publications and reports. Results. In Ukraine, the introduction of digital financial technologies to expand access to banking services within the framework of remote banking technologies has both a number of achievements and many problems, the solution of which requires appropriate measures taken by state authorities. A positive thing is the rapid development of computer programs for the introduction of remote banking and their implementation in the work of state banks. The still relatively low share of remote service coverage for corporate and retail customers can be singled out as bottlenecks. Other significant problems include the slow implementation of legislative and regulatory initiatives in this area, in particular those defined in the framework of the Strategy for the Development of the Financial Sector. Conclusions. The analysis showed that Ukrainian banks differ significantly in the development of remote banking services (RBS), there is a gap between leaders and outsiders in the quality and scope of remote banking services. The leading positions of PrivatBank and Sens-Bank (in certain aspects) are largely due to the legacy of the period when they were in private ownership, but since then other commercial banks have made significant progress. In working out a development strategy, banks need to provide for regular surveys of the clientele and marketing analysis of situations and the latest trends in order to predict the behavior of customers and respond adequately to their needs and behavior patterns. At the same time, banks are already able to act proactively, educating and encouraging customers to use RBS channels. International and Ukrainian experience sometimes demonstrates failures in the implementation of RBS projects. Therefore, it is advisable to implement the concept of balanced development of all product delivery channels in the savings bank with an emphasis on remote customer service, introduce user training programs, and adapt application interfaces.

Peran Mediasi Dari Inovasi Karyawan Pada Hubungan Antara Internet Banking Dan Kinerja Karyawaan

This quantitative research analyzes the influence of Internet banking and employee innovation on employee performance. Data analysis in this study used the Structural Equation Modeling (SEM) method. With Smart-PLS software, the population in this study was private banking employees in Jabodetabek with a sample of 120 using purposive sampling with the criteria of remote bank employees having worked in the private sector for at least one year. The study results show that Internet banking positively affects employee performance. In contrast, internet banking has a positive effect on employee innovation and employee innovation, and employee turnover positively affects employee performance.

Ecosystem as a business model of the bank in the era of remote banking

In the conditions of active digitalization of the banking sector, remote banking is becoming a key condition for the bank's competitiveness. This article analyzes the ecosystem of banks based on statistical data. The main purpose of the work is to analyze the effectiveness of ecosystem business in remote banking. The article identifies promising directions for the development of digital banking, factors that determine the formation of a new business model of banks, clarifies the concept of omnichannel and remote banking services, taking into account the peculiarities of the development of the ecosystem of banks. Particular attention is paid to the ecosystems of Sberbank JSC "Tinkoff Bank".

An Enhanced Data Transmission in Mobile Banking Using LSB-AES Algorithm

The advent of mobile banking applications has transformed the way customers’ access banking services from brick-and-mortar to remote banking. The ubiquitous nature of this innovation has encouraged its adoption. This is because of improved banking services and accessibility to the services on a 24/7 basis using the internet. However, mobile banking applications are susceptible to numerous security threats and vulnerabilities that adversaries take advantage of to siphon money from bank customers. The aim of this study is to design and evaluate least significant bit and advanced encryption standard cryptography (LSB-AES) hybrid algorithm to protect data on transmission in mobile banking. This study employs data science research design, and performance evaluations demonstrated through simulations using MATLAB. Findings of this study can be applied to banks offering mobile banking across the world. This study utilized six color images from University of Southern California’s Signal and Image Processing Institute (USC-SIPI) dataset which were stored in Tagged Image File Format (TIFF). Contemporary steganographic systems utilize a minimum of 2 to 10 images for test simulations. Visual quality analysis of cover images and stego images was done using the following evaluation metrics: Mean Squared Error (MSE), Peak Signal-to-Noise Ratio (PSNR), and histogram analysis. Security of the proposed algorithm was done using entropy analysis. MSE values of cover and stego images should be closer to zero and indicate that cover image is of good quality for embedding data. On the other hand, PSNR values should be more than 40 decibel (dB) which indicates good imperceptibility. Histogram analysis should demonstrate no visible distortions between the cover and stego image for it to be free from statistical attacks. Entropy analysis should yield values close to 8 for the algorithm to be robust. Results from the proposed LSB-AES hybrid algorithm evaluation metrics reveals that Mean Squared Error (MSE) values ranges from 0.0001297 to 0.0005646 while Peak Signal-to-Noise Ratio (PSNR) values ranges from 80.65 to 87.71 and entropy values ranges from 6.295 to 7.762. Histogram analysis reveals that the cover and stego images are almost similar. These results infer that the proposed algorithm has good quality images with good imperceptibility and that the proposed algorithm is reliable, robust and secure for mobile banking. Entropy and histogram analysis results show that the proposed algorithm is resistant to Man-in-the-Middle attacks. This study recommends that legislation evaluates and amends security of mobile banking policies so that the proposed LSB-AES hybrid algorithm can be adopted as a secure solution for mobile banking.

Fintech applications in social welfare schemes during Covid times: An extension of the classic TAM model in India

AbstractIn terms of remote banking services for social welfare programmes, fintech has completely changed the game for financial institutions, particularly during the COVID pandemic. However, many recipients continue to be dubious due to fears about its security. This study aims to create an extended technology acceptance model (TAM) that incorporates perceived risk, trust and innovation diffusion theory into the conventional TAM model to understand better the variables that influence user adoption and implementation of Fintech technologies. The critical FinTech applications were evaluated using the hypothetical classic model, which included external influences. The proposed model (urban poor beneficiaries‐TAM) was experimentally verified using semi‐structured questionnaires and structural equation modelling data. This research shows that attitude has a considerable impact on how fintech apps are meant to be used, outweighing usefulness and risk as factors that directly affect how they are used. The report concludes by discussing the critical organizational consequences and offering a variety of strategies for maintaining this recently innovative business in light of current technological improvements.

Digitalization of the Banking Sector Economy: Problems and Ways of Improvement

This article discusses some of the problems and ways to improve the banking sector digitalization economy, or rather the process of promoting Internet banking of banking services. Research objectives: to reveal the relevance of digitalization of banking services in the economy, to identify the advantages and disadvantages of banking digitalization. Research materials and methods: a SWOT analysis of Internet banking in the activities of commercial banks is being carried out. Research results: implementation of an economic assessment in the implementation of banking products and the development of proposals for improving the work of commercial banks. Conclusions: in order to improve the digitalization of the banking sector of the economy, it is necessary to develop bank strategies with the widespread use of remote banking services (hereinafter RBS), which is important, especially in the context of the global financial crisis, the intensification of competition between commercial banks and the correct use of Internet banking in the banking services market.

Remote banking services in Russia

Remote banking services in Russia

Theoretical approaches to interpreting the essence of banking innovations and determining the goals of their implementation

Any scientific study of the development of economic systems or society directly or indirectly determines the need for innovations, which are the driving force of qualitatively new, progressive changes. The article examines the evolution of the concept of "innovation" and the features of its application in banking. The author addresses theoretical approaches to the interpretation of the essence of "banking innovation" and reveals that the main goal of the innovative activity of banking institutions is to make a profit and improve their competitive positions. The article substantiates that the innovative activity of banks is not the same as the concept of financial innovations, and the latter is an element of the innovative activity of banking institutions. Characteristics of financial innovations and the reasons for the frequent identification of the essence of financial and banking innovations are analyzed. They are analyzed and structured according to the goals and directions of their implementation. The comparison of innovations and financial innovations is analyzed and their main similarities and differences are revealed. The dependence of financial investments on the bank’s competitiveness and the peculiarities of their relationship are outlined. Factors influencing the innovative component of banking institutions are structured. The article shows that the presence of qualitatively new changes contributing to increasing the efficiency of the use of banking institutions’ resources in the conditions of digitalization and remote banking is the main characteristic of banking innovations. It also reveals that the trend towards digitalization of all spheres of social life, including banking, has a significant influence on banking innovations, however, in the context of this trend, the aspect of guaranteeing the financial security of the banking segment becomes important. Given the resource investments aimed at financing the implementation of innovations in the field of banking services, the characteristic signs of investment are identified. The actual implementation of innovations, like investments, involves spending money now in order to obtain economic benefits in the future. That is, the objective and ultimate goals of innovation and investment coincide. However, the concept of investment is broader than innovation and includes the latter. They correlate as a whole and a unit when viewed from the perspective of philosophical categories.

АНАЛІЗ ТРАНСФОРМАЦІЇ БАНКІВСЬКИХ ПОСЛУГ З ВИКОРИСТАННЯМ СИСТЕМИ ДИСТАНЦІЙНОГО ОБСЛУГОВУВАННЯ

The article describes the essence of banking services using remote banking: Home-banking, Tele-banking, PC-banking, Internet banking, Mobile banking. It is stated that remote banking services first appeared in the United States of America. The remote banking services in Europe are analyzed. The volume of non-cash transactions in the world is estimated. The article analyzes how the use of services has changed before and during the COVID-19 crisis. A detailed analysis of the history of the introduction of remote banking services in China is provided. It can be noted that online transactions prevail in China, but the mobile industry is starting to become more and more popular. As the Internet and online services became more and more widespread, most of China's traditional banks felt the status quo and started to create platforms called Mobile Banking that offered a variety of traditional services in their applications. As one of the widespread services in China in these years, it synthesizes the current trend of mobile communication with the digitalization of money. It is concluded that in order to be competitive in the banking services market, banking institutions need to follow the development of modern information and telecommunication technologies, try to implement them and constantly improve customer service.