url
10
Feb
2014

THE EFFECT OF BANKING EXPANSION ON PROFIT EFFICIENCY OF SAUDI ARABIA COMMERCIAL BANKS: DATA DESCRIPTION

THE EFFECT OF BANKING EXPANSION ON PROFIT EFFICIENCY OF SAUDI ARABIA COMMERCIAL BANKS: DATA DESCRIPTIONMobile banking can be expected to follow in the footsteps of PC banking, as a new distribution channel. It can be traced back to mainly following factors: penetration of society by mobile phones; power of mobile devices; necessity of mobility; following “fit for future” strategy; and taking the “early mover” advantage.
Daniela& Octavia illustrates three technical ways of stocking financial information in the mobile phone. They are using only one chip, where the SIM card has functionalities of WIM (Wireless Identity Module); using two cards, the SIM and the WIM and using dual slot, for the two cards, with a card reader for the bank card.
Khalfan& Alshawaf illustrates factors that inhibit PC banking applications in Oman. The major factors are “the lack of top management support’ and “information privacy and security issues”. El-Bannany finds that investment in IT systems affects bank profitability positively in the UK, while the relation has not been supported in Egypt.
Researchers have examined new banking products in context of different sub-disciplines, including banking, financial economics, monetary economics, macroeconomics, network economics, regulatory economics, industrial organization, and consumer behavior.
Prasad & Harker examines the effect of IT investments on both productivity and profitability in the retail banking sector, as applied on 115 banks in the United States for the years 1993-1995. The additional investment in IT capital may have no real benefits, and may be more of strategic necessity to stay even with competition. However the results indicate that there’re substantially high returns to increase IT labor, and that the retail banks need to shift emphasis in IT investments from capital to labor.
The cost savings came largely through back office automation, but the key to profitability is through revenue enhancement. The banking industry is moving from “cost- saving” to “revenue- enhancing” innovation.
Berger& DeYoung, uses cost efficiency, as the ratio of bank costs, to the minimum bank cost across all the banks in the sample. Also, Profit efficiency, is measured as the ratio of bank profits, to the maximum bank profits across all the banks in the sample.
In this study, the sample contains 6 Saudi commercial banks, out of 11 ones working in the Saudi banking market. Data are collected to cover the period from 31/12/1998 to 31/12 2007, and for each bank/ year observations, the following data have been collected: Net Profit (P), Assets (A), Equity (E), Capital (C), Number of Branches (BRA), Number of ATMs (ATM), Number of POSs (POS), Availability of Phone Banking (PHO), Availability of PC Banking (PCB), and Availability of Mobile Banking (MOB).
After having calculated the previous variables, for each bank in the sample, over the study period, the steps of test design could be illustrated as follows.

Mobile banking can be expected to follow in the footsteps of PC banking, as a new distribution channel. It can be traced back to mainly following factors: penetration of society by mobile phones; power of mobile devices; necessity of mobility; following “fit for future” strategy; and taking the “early mover” advantage. Daniela& Octavia illustrates three technical ways of stocking financial information in the mobile phone. They are using only one chip, where the SIM card has functionalities of WIM (Wireless Identity Module); using two cards, the SIM and the WIM and using dual slot, for the two cards, with a card reader for the bank card. Khalfan& Alshawaf illustrates factors that inhibit PC banking applications in Oman. The major factors

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Kevin J. Brandon

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