Saudi Arabian Banking Research Articles

Tackling techno-stress: Supervisor support and job clarity as catalysts for employee satisfaction

Purpose: This research aims to investigate the impact of technological challenges, including techno-overload, techno-complexity, and techno-insecurity, on employee job satisfaction within the banking sector of Saudi Arabia. Additionally, the study examines the mediating roles of supervisor support and job clarity in buffering the effects of technological challenges on job satisfaction. Method: The study employs a quantitative research design, utilizing an online questionnaire to collect data from banking employees in Saudi Arabia. The sample size of 135 participants was determined using the rule of thumb technique. Random sampling was utilized to ensure representativeness. Data analysis was conducted using Statistical Package for Social Sciences (SPSS) to explore the relationships between technological challenges, supervisor support, job clarity, and employee job satisfaction. Findings: The findings of the study reveal a significant negative impact of techno-overload, techno-complexity, and techno-insecurity on employee job satisfaction within the banking sector of Saudi Arabia. Moreover, supervisor support and job clarity were found to mediate these relationships, highlighting their importance in mitigating the adverse effects of technological challenges on job satisfaction. Originality/Significance: This research contributes to the existing body of knowledge by providing empirical evidence on the relationships between technological challenges, supervisor support, job clarity, and employee job satisfaction within the specific context of Saudi Arabian banks. The findings have significant implications for organizational leaders and managers in developing evidence-based strategies to manage technological challenges and promote employee well-being in the banking sector of Saudi Arabia.

Artificial Intelligence in the Saudi Arabian Banking Sector: Role in Customer Satisfaction and Its Implementation Challenges

The study aimed to examine the impact of artificial intelligence on customer satisfaction and the challenges Saudi Arabian banks face in implementing this cross-cutting technology. The study used a survey design and collected responses from 100 participants, mainly bank customers and bank officials. The result revealed that artificial intelligence (AI) is positively and significantly correlated with customer satisfaction (CS). This suggests that customer satisfaction tends to rise in tandem with the application of AI in banking. The mediation analysis result showed that Ease of Use only mediates 9.82% of the relationship between AI and CS, and it is not statistically significant (β=0.0607 (95% Cl: -.0246, .146), z=1.39, p=0.163. The study provides practical insights for Saudi Arabian banks, highlighting the need to enhance the adoption of AI to promote customer satisfaction. It also outlines frameworks for minimizing challenges and barriers against the implementation of AI, including promoting data security and customer privacy.

Examining the influence of Saudi mobile banking service quality on customer satisfaction in Saudi Arabian banking industry

Examining the influence of Saudi mobile banking service quality on customer satisfaction in Saudi Arabian banking industry

The Role of Artificial Intelligence in Customer Satisfaction and Its Implementation Challenges in the Saudi Arabian Banking Sector

The Role of Artificial Intelligence in Customer Satisfaction and Its Implementation Challenges in the Saudi Arabian Banking Sector

Exploring the interplay of financial literacy and financial well-being: Insights and strategies for augmenting overall financial satisfaction

This study investigates how financial literacy affects the financial health of Saudi Arabian banking industry workers in Saudi Arabia. The study uses a sample of 183 individuals and a comprehensive framework that includes components like financial behaviour, risk management, financial planning, financial knowledge, financial confidence, financial communication, and overall financial pleasure. The study finds strong positive correlations between many aspects of financial well-being and financial literacy through correlation and regression analysis. Notably, risk management, financial behaviour, overall financial contentment, and financial confidence are all positively impacted by financial literacy. The results underscore the multifaceted character of financial well-being and underscore the critical function of financial literacy in moulding favourable financial consequences. Furthermore, the study pinpoints particular domains in which focused financial literacy initiatives might be executed to augment the general financial welfare of banking industry staff members. The study sheds light on the relationship between financial literacy and well-being in a particular occupational context, which is significant information for both the academic and practical domains. The banking industry needs customized financial education programs because of the social and management ramifications. These programs will help the community’s overall financial health in addition to providing benefits to individual employees. In its conclusion, the study makes recommendations for other research directions, such as longitudinal studies and examinations of the function of digital financial literacy in the changing banking environment.

Analyzing microeconomic determinants of non-performing loans in Saudi Arabian banks: Implications for banking sector health and risk management

This research aims to study the smaller economic factors that influence the percentage of loans that banks in Saudi Arabia have given out but are not getting repaid. It uses data from 10 Saudi Arabian banks, covering 130 instances from the years 2009 to 2021, to figure out which economic factors at the bank level matter most. These factors are taken from the banks' yearly financial statements. The study looks at five specific factors suggested by earlier research, which are believed to impact the percentage of these non-repaying loans in the banking sector. These factors are the ratio of loans to deposits, the capital adequacy ratio (CAR), the return on assets (ROA), the net interest margin (NIM), and the size of the bank. The findings reveal that the size of the bank, its CAR, its ROA, its ratio of loans to deposits (which has a reverse effect), and its NIM (which has a direct effect) all play significant roles in determining the percentage of non-repaying loans in Saudi Arabian banks. Understanding these factors is crucial for getting insights into the health of the banking system. Monitoring and evaluating the ratio of non-repaying loans is important for keeping the financial system healthy and supporting steady economic growth. The study suggests that to manage the risks of loans not being repaid and to keep the banking system stable, effective policies and risk management practices are needed. It advises that banks improve their lending processes to manage non-repaying loans better and ensure profits for their shareholders.

Driving Digital Transformation: Analyzing the Impact of Internet Banking on Profitability in the Saudi Arabian Banking Sector

This study examines the impact of Internet Banking on banking profitability in Saudi Arabia in a sample of conventional and Islamic banks. The study uses Return on Assets (ROA) and Return on Equity (ROE) as key metrics to measure profitability in a sample of 10 Saudi conventional and Islamic banks observed over the 2013–2022 period. The used regression analysis reveals a significant effect of Internet Banking on the profitability of both conventional and Islamic banks, as indicated by the ROA and ROE metrics. These findings have implications that underscore the strategic importance of adopting Internet Banking, emphasizing its substantial contribution to the financial performance of both conventional and Islamic banks in the Saudi Arabian banking landscape. This study offers critical insights into the strategic significance of Internet Banking for Saudi Arabian banks’ profitability and future planning, in line with the 2030 Vision goals. This research also supports informed decision making in the digital era, emphasizing the pivotal role of Internet Banking in shaping the future of the Saudi Arabian banking industry.

Job quality in the Saudi Arabian banking sector: Implications for employee performance and organizational outcomes

Within the Saudi Arabian banking sector, the quality of work life emerges as a crucial determinant shaping employee performance. This research delves into the nuanced impacts of diverse job quality facets on employee efficacy within this domain. Employing a stratified random sampling methodology, 500 institutions were selected, yielding a 49.6% response rate, or 248 completed surveys, with the active engagement of senior management. Utilizing a quantitative paradigm, the study harnessed descriptive statistics and structural equation modeling (SEM) to elucidate the interplay between job quality dimensions and performance outcomes. The analysis revealed that elements like compensation structures, work-life equilibrium, and growth opportunities substantially influenced employee productivity. In contrast, most job quality facets garnered positive evaluations, and aspects related to wage and compensation exhibited room for enhancement. The research accentuates the imperative of elevating job quality benchmarks within the banking sector to augment employee contentment and performance metrics. This study’s insights advocate for stakeholders and policymakers to champion job quality as a pivotal driver for optimizing organizational effectiveness.

Fintech Service Quality of Saudi Banks: Digital Transformation and Awareness in Satisfaction, Re-Use Intentions, and the Sustainable Performance of Firms

The present study examined the effects of the service quality regarding fintech and customer satisfaction on the sustainable bank performance, with digital transformation and digital awareness as the mediator and moderator in the Saudi Arabian banks. Using an online survey questionnaire, data were collected from 306 customers and an equal number of customer care officers, resulting in a 62.58% response rate. The findings revealed that the tangibles, reliability, and empathy about the fintech services significantly influence customer satisfaction. However, assurance and responsiveness did not significantly influence customer satisfaction. The results also showed that customer satisfaction regarding fintech services significantly and positively influences the intention to re-use fintech services, indicating the centrality of maintaining a high customer satisfaction for retention. Interestingly, while the intention to re-use fintech was directly linked to the sustainable performance of banks, the direct impact of digital transformation on the performance was not significant. Additionally, digital awareness about using fintech services significantly and positively influences the sustainable bank performance. The study also tested the moderating effect of digital awareness between customer satisfaction and sustainable performance, but the relationship was not significant. By offering the study’s novel findings, this research underscores the implications of fintech adoption and its quality dimensions on bank performances in the Saudi context.

Evaluating the impact of COVID-19 on the profitability metrics of Saudi Arabian banks: A panel data analysis

This study aims to evaluate the impact of the COVID-19 pandemic on the profitability of Saudi Arabian banks from Q1 2015 to Q2 2023. Using quantitative analysis of panel data from ten banks, the study assesses profitability through Return on Assets (ROA) and Return on Equity (ROE). Independent variables include bank-specific factors (Capital Ratios (CPTL), Operational Efficiency (OPEF), Deposits (DEP), Bank Size (SIZE)) and country-specific factors (Inflation (INF), Gross Domestic Product (GDP)), with the pandemic as a moderating factor. The findings reveal varied relationships between these variables and bank profitability. A significant negative relationship is observed between CPTL and ROE, suggesting that higher capital ratios may decrease profitability. OPEF and SIZE also show significantly negative relationships with both ROA and ROE, indicating that increased operational efficiency and bank size could lead to lower profitability. Conversely, DEP positively correlates with ROE, implying that banks with higher deposits achieve better equity returns. Interestingly, GDP and INF do not significantly affect bank profitability. These insights highlight the resilience and operational dynamics of the Saudi banking sector during COVID-19, emphasizing its robustness. The findings offer practical implications for policymakers, regulators, and banks in preparing for future systemic shocks and ensuring the sector's sustainability and stability.

The Impact of IFRS Mandatory Adoption on the Performance of Saudi Banks

The study aims to determine the impact of IFRS mandatory application on financial and market performance, in the Saudi Arabian banking sector for the period from 2012 to 2021. The results of this study show that there is no relationship between the IFRS mandatory application and each of the rates, return on equity, and return on assets, while there is an inverse relationship with earnings per share. In terms of the effect on the market performance, the study concluded that there is no relationship between the IFRS mandatory application and each of the volume and value of trading, and there is a positive relationship on the growth rate. The study attributed these results to several reasons, the most important of which is the gradual application of the IFRS, which was followed by Saudi Arabia, in accordance with strict executive procedures from the Saudi Arabian Monetary Authority (SAMA).

Are Saudi Arabian banks’ mobile applications accessible for blind or partially sighted users?: a customers’ perspective and evaluation

AbstractThis study investigated the accessibility problems and barriers faced by visually impaired Arabic speakers when using banking mobile applications. The sample included mobile applications for the top three banks in Saudi Arabia in terms of their customer base, including applications for AlRajhi, SNB, and Riyad bank. The focus was on the three most popular e-services provided by those applications. Using a mixed method approach, accessibility was inspected manually according to current Web Content Accessibility Guidelines (WCAG 2.1). In addition, in-depth usability testing for those applications was conducted with 12 blind Arabic-speaking users. The results revealed that the accessibility level for all sample applications did not conform to WCAG 2.1, which reflected the low accessibility level provided by these applications. However, AlRajhi’s application was the best among the tested applications. In manual inspection, it had the lowest number of violations of success criteria compared to SNB’s and Riyad’s applications. It also achieved the best results in usability testing in terms of effectiveness, efficiency and satisfaction compared to the other two applications. The overall results showed that the current situation of accessibility of Saudi banking applications is not very satisfactory in terms of number of violations to WCAG 2.1 success criteria. The most violated principle by all the applications was operable, with around 37% of total violations, followed by perceivable, then robust and understandable.

The Cost Efficiency and Competition Relationship: Evidence from Saudi Arabian Banks and Non-Structural Approaches to Analysis

Over the last two decades, the regulators of the financial services sector in Saudi Arabia have aimed to develop a level of fair competition in the provision of banking services across the country. This paper utilizes non-structural approaches, the H-statistic developed by, and the Granger causality test. The second approach involves determining the Granger-based causal relationship between banks’ cost efficiency and competition via data envelope analysis (DEA) using the generalized method of moments (GMM) panel. The study’s data were drawn from 11 traditional banks in Saudi Arabia, covering the period from 2015 to 2021 (yearly data). The results of the non-structural approach, i.e., the H-statistic, demonstrate that the average fund rate had a positive effect on competition; however, the physical capital price index, the index of leverage, and the credit risk negatively affect the total revenue. Furthermore, a positive H-statistic value reflects the positive causality between competition and cost efficiency (higher efficiency results in a higher level of competition). The DEA results indicate that competition in the year 2021 was influenced by the competition level of the previous year (2020); moreover, the relationship between the previous year’s cost efficiency Granger value, the greater availability, and the lower prices of banking products had a significant influence on the competition in the years under consideration (since a positive significant result from the test is available), which reflects the higher level of market structure and the greater availability and lower prices of banking products. Cost efficiency in the year 2021 was also positively influenced by the cost efficiency level of the previous year (2020), with competition forcing efficiency via the cutting of costs.

Financial performance and service quality of Saudi Arabia banks: An analytical approach

Service quality plays an important role in the enhancement of the satisfaction level of customers or consumers and the financial performance of business organizations. Customers expect excellence in service quality and the gap between the expectations and availability of the services determines the level of the service quality of the business organizations. The primary objective of the study is to measure the service quality of Saudi Arabian banks. An online questionnaire containing SERVQUAL dimensions was administered, and responses were analyzed by applying the F test two sample variances, and rank correlation. Financial information extracted from the selected Saudi Arabian banks for the period 2018 to 2022 and ROA (return on assets) and ROE (return on equity) were calculated to get the financial performance. The combined study of rank analysis of financial variables and SERQUAL variables indicates that financial performance is positively and moderately governed by the Tangibility, Assurance, and Empathy dimensions of service. Overall, the expectations of the bank clients are higher than the availability of services in Saudi Arabian banks. There is a need to improve the Reliability and Responsiveness to enhance the level of service quality in Saudi Arabian banks.

Factors influencing career sustainability in Saudi Arabian banks: A PLS-SEM analysis

This research delves into the correlation between organizational career growth and its impact on career sustainability among employees in the Saudi Arabian banking sector. It also explores the mediating influence of task performance and organizational citizenship behavior. Utilizing self-reported online questionnaires, data was collected from employees in Jeddah and Riyadh, Saudi Arabia, working in both private and public banks. Approximately 255 surveys were gathered, and thorough scrutiny of the data was conducted to identify any instances of common bias, duplication, or missing values. Following this data cleaning process, a sample size of 200 was retained for subsequent analysis. The survey, conducted over a month from December 2022 to January 2023, targeted four key factors: organizational career growth (OCG), organizational citizenship behavior, task performance, and career sustainability. The study utilized partial least squares structural equation modeling (PLS-SEM) and path analysis, a combination that allows observed variables to represent latent variables while elucidating causal relationships between them. The findings showed that organizational career growth has a positive and significant influence on organizational citizenship behavior, task performance, and career sustainability. The SRMR value of 0.078 indicates a good fit between the observed data and the model; while the normed fit index (NFI) score of 0.957 shows that the model fits the data well. In addition, the study utilized the blindfolding technique to evaluate the model’s predictive validity. The results show that organizational career growth exerts a moderate effect on both task performance (Q2 = 0.218, Q2 = medium effect) and career sustainability (Q2 = 0.281, Q2 = medium effect) and has a limited impact on organizational citizenship behavior (Q2 = 0.136, Q2 = small effect). Expanded career opportunities within the organization led to better task performance and organizational citizenship behavior, indirectly boosting employees’ career sustainability in banking sector. Detailed managerial insights are also provided.

Analyzing the impact of mergers on stock prices in the banking sector: An implication for strategic merger planning and stakeholder communication

This research delves into the intricate effects of mergers and acquisitions (M&A) on stock prices within the Saudi Arabian banking sector, employing the event study methodology (ESM) to examine both short-term and long-term impacts on stock valuations. The study meticulously calculates expected and abnormal returns (ARs) around merger events, shedding light on the significant influence these corporate actions exert on market perceptions and investor behavior. The methodology encompasses an analysis of daily stock price data before and after merger events, providing a detailed view of market reactions. Key findings reveal an immediate positive market response to merger announcements, driven by the anticipation of synergistic benefits, alongside diverse long-term stock price effects that underscore the complex relationship between initial expectations and actual merger outcomes. The research concludes that strategic merger planning and effective communication with stakeholders are crucial for realizing the anticipated benefits of mergers. By offering new insights into the sector-specific and regional dynamics that affect M&A outcomes, this study enhances understanding of the significant implications for investors, financial institutions, and policymakers engaged with the Middle Eastern financial markets.

EVALUATION OF SHARI'AH GOVERNANCE PRACTICES IN SAUDI ARABIAN BANKS

Islamic banking is witnessing a significant increase in worldwide demand for its products alongside the increased interest in Sharīʿah governance, which is an essential means of ensuring that the products and activities of Islamic banking institutions fully comply with Sharīʿah (Islamic law), meet customer needs, and increase their competitiveness in both local and international markets. The aim of this paper is to evaluate Sharīʿah governance practices in Saudi Arabian banks and also ‎examine the level of adherence to Sharīʿah governance principles, institutional ‎frameworks, regulatory standards, and procedures within Saudi banks. This paper ‎employs a descriptive analysis approach, while the data were collected through a ‎questionnaire survey from 95 members of Sharīʿah advisory boards, Sharīʿah groups, and Sharīʿah governance committees ‎in 11 banks operating in Saudi Arabia. A regression analysis was performed to estimate relationships between the level of compliance and commitment to Sharīʿah governance in Saudi banks as a dependent variable, and the implementation of Sharīʿah governance, its dimensions, and the availability of implementing procedures of Sharīʿah governance as independent variables. The findings confirm the existence of variations between banks at ‎the level of implementing Sharīʿah governance principles and standards. The dimensions ‎of Sharīʿah governance received varying levels of attention in the banks, with ‎organizational structure ranking first, followed by the dimensions of responsibility and ‎disclosure, and finally, control, auditing, and accountability. The study reveals ‎disparities in the implementation levels of Sharīʿah governance between banks with full-fledged Sharīʿah compliance and conventional banks that offer Islamic windows. ‎Additionally, the study indicates differences in the adequacy of implementing ‎procedures for Sharīʿahgovernance principles and standards in both types of Saudi banks, attributed ‎to variations in bank size, product type, and organizational structure. The results of ‎the regression analysis demonstrate that the ‎implementation of Sharīʿah governance dimensions and the availability of implementing ‎procedures have a statistically positive effect on the level of commitment to Islamic banking and Sharīʿah governance. The paper suggests a necessity for training personnel in Islamic ‎banking, activating the role of Sharīʿah compliance units, and developing the ‎Sharīʿah governance framework in Islamic banking operations in Saudi Arabia.

The Association between Corporate Social Responsibility, Employee Performance, and Turnover Intention Moderated by Organizational Identification and Commitment

Corporate social responsibility (CSR) holds increasing significance within Saudi Arabia’s banking sector. By adopting responsible and sustainable practices, banks can not only enhance their financial performance but also bolster the trust and loyalty of their customers. The sector recognizes that high turnover rates and subpar performance can lead to elevated costs and reduced trust in the bank’s services. Consequently, this study aims to investigate how organizational identification and commitment mediate the relationship between CSR, employee performance (EP), and turnover intention (TI). Following a survey with 550 employees, the structural equation modelling technique was applied to test the study’s model and complex relationships. The study assessed 12 hypotheses, 8 of which represented direct relationships, while the remaining 4 explained the mechanisms of the mediating relationships. All of these hypotheses show significant relationships. All variables explained the variance of EP by 42% while explaining the variance of TI by 28%, which had a moderate effect on the dependent variables. The model indicates that values are well constructed and that the model has predictive relevance due to Q2 being above 0. The study’s findings demonstrate that organizational identification and commitment channel the link between corporate social responsibility and employee performance and turnover intention. The study underscores the significance of CSR, organizational identification, and commitment in the Saudi Arabian banking sector. It provides valuable insights for banks to enhance employee performance, reduce turnover intention, and strengthen corporate social responsibility initiatives.

Do Corporate Governance Internal Characteristics Affect the Level of Sustainability Reporting in Saudi Arabian Banks?

The main purpose of our study is to do Corporate Governance Characteristics Affect the Level of Sustainability Reporting in Saudi Arabian Banks? A descriptive research design was employed targeting 12 banks. Secondary data were collected from the banks’ annual reports. Time series data comprising three years (2015 to 2017) were used. The study established that the relationship between corporate governance characteristics (board size, independent directors, CSR committee) and sustainability reporting was increasing with time. Regarding control variables firm size and firm age did not have a significant controlling effect on sustainability reporting. The results of our study will be useful for bank managers, government officials, practitioners, and policymakers to provide the opportunity to Saudi banks to expand the globally market liberalization. Our study also contributes to the existing literature, which investigates how Corporate Governance Characteristics Affect the Level of Sustainability Reporting in Saudi Arabian Banks.

Impact of business enablers on banking performance: A moderating role of Fintech

The main purpose of this paper is to examine the impact of business enablers and financial technology (Fintech) on the banking industry in order to determine whether it is an opportunity or a disruption. The applied research design is quantitative, and the hypotheses and the model were tested. To achieve the objectives, the study used a questionnaire to collect data. 150 managers in Saudi Arabia banks were surveyed. The participants provided 130 substantial and valid responses, and the PLS-SEM technique was used. Based on the analysis, it was concluded that the presence of business enablers facilitated Fintech progress, which led to the increase in bank performance, from the economic, social and environmental point of view. In addition, Fintech also plays a mediating role, by increasing the positive impact of business enablers. Therefore, Fintech provides several opportunities, not a disruptive technology, for the banking industry. The research paper explains the importance of Fintech progress in Saudi Arabian banking. Many have viewed Fintech as a disruptive technology, but this study found that it presents various opportunities for the Saudi Arabian banking industry.