Special Issue "Sustainability, Digital Transformation and Fintech: The New Challenges of the Banking Industry"

A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (31 December 2020).

Special Issue Editor

Prof. Dr. Andrea Pérez
Website
Guest Editor
Business Administration Department (Yunus Centre Cantabria), University of Cantabria, Santander, 39005, Spain
Interests: corporate social responsibility; CSR communication; consumer behavior; social entrepreneurship; social marketing; banking; fashion; tourism
Special Issues and Collections in MDPI journals

Special Issue Information

Dear Colleagues,

This Special Issue will comprise a selection of papers addressing relevant issues concerning the current challenges and opportunities for banking institutions internationally. In the current competitive scenario, the banking industry must contend with multiple challenges tied to regulations, legacy systems, disruptive models and technologies, new competitors, and a restive customer base, while pursuing new strategies for sustainable growth. Banking institutions that can address these emerging challenges and opportunities to effectively balance long-term goals with short-term performance pressures could be amply rewarded. Therefore, papers submitted to this Special Issue should cover topics including the digital transformation of the banking industry and its effect on sustainability, the emergence of new competitors such as Fintech companies, and the role of banking institutions in covering the 2030 Agenda for Sustainable Development and the UN Principles for Responsible Banking. General sustainability and corporate social responsibility (CSR) topics related to the banking industry will also be welcomed. Papers selected for this Special Issue will be subject to a rigorous peer-review procedure with the aim of rapid and wide dissemination of research results, developments, and applications.

The Special Issue is sponsored by the Santander Financial Institute (SANFI), a Spanish research and training institution created as a collaboration between Santander Bank and the University of Cantabria. SANFI works to identify, develop, support and promote knowledge, study, talent and innovation in the financial sector.

Prof. Dr. Andrea Pérez
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1900 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • banks
  • banking industry
  • finance
  • digital transformation
  • fintech
  • sustainability
  • SDGs
  • development goals
  • corporate social responsibility
  • CSR

Published Papers (28 papers)

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Open AccessArticle
CSR Communication through Social Media: A Litmus Test for Banking Consumers’ Loyalty
Sustainability 2021, 13(4), 2319; https://doi.org/10.3390/su13042319 - 20 Feb 2021
Viewed by 254
Abstract
Prior literature in the field of corporate social responsibility (CSR) has largely focused on investigating its relationship with organizational-related outcomes, whereas the impact of CSR on consumer behavior is largely ignored in the recent literature. Further, most of the prior studies have investigated [...] Read more.
Prior literature in the field of corporate social responsibility (CSR) has largely focused on investigating its relationship with organizational-related outcomes, whereas the impact of CSR on consumer behavior is largely ignored in the recent literature. Further, most of the prior studies have investigated CSR with a philanthropic viewpoint, but its importance in achieving marketing-related outcomes is something that is to date, underexplored. Hence, the aim of the present study is to investigate the impact of CSR communication through social media on consumer loyalty with the mediating effect of consumers’ brand admiration in the banking sector of Pakistan. The banking sector was selected due to the reason that this sector is homogenized in nature and creating consumers’ loyalty due to this homogenized character of this sector is challenging. The data of the present study were collected from different banking consumers through an adapted questionnaire on a five-point Likert scale. A total of 448 fully filled questionnaires were received which included 289 male and 159 female banking consumers. The results of the present study revealed that CSR communications through social media have a positive impact on consumer loyalty, and consumers’ brand admiration partially mediates this relationship. The findings of the present study would help policymakers from banking institutions to use CSR strategy from the perspective of marketing which is undoubtedly very important for every organization in the current digital age. Full article
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Open AccessArticle
Digital Transformation in Banking: A Managerial Perspective on Barriers to Change
Sustainability 2021, 13(4), 2032; https://doi.org/10.3390/su13042032 - 13 Feb 2021
Viewed by 302
Abstract
The digitalisation of banks is seen as the omnipresent challenge which the banking industry is currently facing. In this digital change process, banks are facing disruptive innovation that requires adaptation of almost all cooperative processes. Digital transformation in the financial industry is associated [...] Read more.
The digitalisation of banks is seen as the omnipresent challenge which the banking industry is currently facing. In this digital change process, banks are facing disruptive innovation that requires adaptation of almost all cooperative processes. Digital transformation in the financial industry is associated with obstacles that seem to hinder smooth implementation of digital approaches. This issue has not been adequately addressed in the current academic literature. The main purpose of this qualitative exploratory study is to identify the main perceived obstacles to digital transformation in both the private and commercial banking sectors from a managerial point of view and to analyse them accordingly. The methodology is based on a methodological approach using a combination of contextual interviews with German board members of banks, inductive content analysis, and the exploration of best-practice approaches. The findings revealed that elements of strategy and management, technology and regulation, customers, and employees receive a high level of attention within the digital transformation. The other main barriers can be found in the areas of market knowledge and products, employee and customer participation, and public benefit. Each main barrier is characterised by several sub-barriers of varying importance for the digital transformation of banks and is described in detail. Full article
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Open AccessArticle
Blending in: A Case Study of Transitional Ambidexterity in the Financial Sector
Sustainability 2021, 13(4), 1690; https://doi.org/10.3390/su13041690 - 04 Feb 2021
Viewed by 358
Abstract
Organizational ambidexterity is widely recognized as necessary for the economic sustainability of firms operating in the financial sector. While the management literature has recognized several forms of ambidexterity, the relationship between them and their relative merits remain unclear. By studying a process of [...] Read more.
Organizational ambidexterity is widely recognized as necessary for the economic sustainability of firms operating in the financial sector. While the management literature has recognized several forms of ambidexterity, the relationship between them and their relative merits remain unclear. By studying a process of implementation of ambidextrous capabilities within a large Scandinavian financial firm, we explore the role of top-down reforms and bottom-up reactions in determining the development of sector-specific innovative capabilities. We find that blended ambidexterity follows naturally from the attempt to correct the tensions arising from harmonic ambidextrous blueprints. The resulting blended practice appears to be closely related to the reciprocal model of ambidexterity, which appears to be a necessity rather than a choice, for large firms attempting to develop innovative capabilities. Consequently, we suggest to re-interpret current taxonomies of ambidexterity not as alternative blueprints, but rather as stages in a long-term process of transition. Full article
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Open AccessArticle
Digital Bank Runs: A Deep Neural Network Approach
Sustainability 2021, 13(3), 1513; https://doi.org/10.3390/su13031513 - 01 Feb 2021
Viewed by 366
Abstract
The introduction of Central Bank Digital Currency (CBDC) could represent a deep structural change to the financial sector, and in particular to the banking sector. This paper proposes a Deep Neural Network (DNN) design to model the introduction of CBDC and its potential [...] Read more.
The introduction of Central Bank Digital Currency (CBDC) could represent a deep structural change to the financial sector, and in particular to the banking sector. This paper proposes a Deep Neural Network (DNN) design to model the introduction of CBDC and its potential impact on commercial banks’ deposits. The model proposed forecasts the likelihood of the occurrence of bank runs as a function of the system characteristics and of the intrinsic features of CBDC. The success rate of CBDC and the impact on the banking sector is highly dependent on its design. Whether CBDC should carry any form of interest, if the amount of CBDC should be capped by account or if convertibility from banks’ deposits should be guaranteed by commercial banks are important features to consider. Further, the design of CBDC needs to contribute to enhancing the sustainability of the financial system, hence a CBDC design that promotes financial inclusion is paramount. The model is initially calibrated with Euro area system data. Results show that an increase in the financial system risk perception would trigger a significant transfer of wealth from bank deposits to CBDC, while the wealth transfer to CBDC is to a lesser extent also sensitive to its interest rate. Full article
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Open AccessArticle
Sustainable Banking, Market Power, and Efficiency: Effects on Banks’ Profitability and Risk
Sustainability 2021, 13(3), 1298; https://doi.org/10.3390/su13031298 - 26 Jan 2021
Viewed by 403
Abstract
The financial crisis seriously damaged the reputation of the banking sector, as well as its profitability and risk of insolvency, which led many banks to adopt a sustainable approach aimed at balancing long-term goals with short-term performance pressures. This article analyses how sustainable [...] Read more.
The financial crisis seriously damaged the reputation of the banking sector, as well as its profitability and risk of insolvency, which led many banks to adopt a sustainable approach aimed at balancing long-term goals with short-term performance pressures. This article analyses how sustainable banking practices affect the profitability and the insolvency risk of banks. Moreover, we examine how sustainable strategies determine the effects of market power and efficiency on bank profitability. We used a two-step System-GMM to analyze an unbalanced panel of 1236 banks from 48 countries over the period 2015–2019. We found that sustainable banking practices increased profitability, and market power was an important determinant of profitability among conventional banks, but not among sustainable banks. Higher levels of cost scale efficiency led to greater profitability for both sustainable and conventional banks. However, there was no significant relationship between sustainable banking and insolvency risk. These results indicate that the traditional determinants of bank profitability are not relevant in explaining the superior profits of sustainable banks, which suggests the emergence of a new paradigm related to sustainability among the drivers of bank profitability. Full article
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Open AccessArticle
Valuation of FinTech Innovation Based on Patent Applications
Sustainability 2020, 12(23), 10158; https://doi.org/10.3390/su122310158 - 04 Dec 2020
Viewed by 459
Abstract
The financial services sector, perhaps more than any other, is being disrupted by advances in technology. The purpose of this study is to provide comprehensive data and evidence on value of the FinTech innovation event. First, a text-based filtering method for identifying FinTech [...] Read more.
The financial services sector, perhaps more than any other, is being disrupted by advances in technology. The purpose of this study is to provide comprehensive data and evidence on value of the FinTech innovation event. First, a text-based filtering method for identifying FinTech patent applications is provided. Using machine learning applications, innovations are classified into major technology groups. The methodology for valuation of FinTech innovation is based on data of stock price changes. To assess the value impact, Poisson flow rates and stock price movements were combined. Further, to evaluate the effect of FinTech patents on the company’s value, a combination of CAR of patent application and Poisson intensities were used. Research findings provide evidence that FinTech innovations bring significant value for innovators and Blockchain being especially valuable. Such innovations as blockchain, robo-advising and mobile transactions are the most valuable for the financial sector. On one side of the spectrum, the financial industry can be affected more negatively by the innovation of nonfinancial startups that carry disruptive technology at their core. However, on the other side of the spectrum, market leaders who make significant investments in their innovations can evade most of these negative effects. This helped to form an overall view of FinTech innovations. Full article
Open AccessArticle
Mobile Banking: An Innovative Solution for Increasing Financial Inclusion in Sub-Saharan African Countries: Evidence from Nigeria
Sustainability 2020, 12(23), 10130; https://doi.org/10.3390/su122310130 - 04 Dec 2020
Viewed by 458
Abstract
Purpose—This research discusses emerging trends in financial inclusion, barriers and factors influencing mobile banking as an innovative solution for increasing financial inclusion in sub-Saharan Africa (SSA) with a specific focus on Nigeria. Design/methodology/approach—Using a qualitative meta-synthesis (QMS), an interpretivist research paradigm, authors provide [...] Read more.
Purpose—This research discusses emerging trends in financial inclusion, barriers and factors influencing mobile banking as an innovative solution for increasing financial inclusion in sub-Saharan Africa (SSA) with a specific focus on Nigeria. Design/methodology/approach—Using a qualitative meta-synthesis (QMS), an interpretivist research paradigm, authors provide an analytical tool for understanding the subject of inquiry by integrating findings from previous studies and relevant data from the reports of the Central Bank of Nigeria on emerging trends in financial inclusion. Findings—Three major factors emerged as drivers of mobile banking in Nigeria: (a) the ease of using mobile devices for personal banking transactions including prompt information about users’ financial transactions (savings and withdrawals) immediately through SMS (short message service) alert (easy management of my account); (b) the security/safety concerns of theft and cyber fraud; (c) social influence of friends, relatives, policy makers and social trends. Implications—In contextualizing mobile banking in SSA and in Nigeria in particular, this paper contributes to exploring the growth in the use of mobile banking by linking it with the “value in use” (VIU) perspective. This approach of the service dominant logic involves three sub-constructs (experience, personalization, and relationship), which all validate and support the proposed assertion that mobile banking is adopted by users because of utility expectancy (perceived usefulness), effort expectancy (perceived ease of use), and social influence expectancy (opinions of friends/relatives). Originality/value—This research, although qualitative in nature, validates information technology (IT) adoption theories/perspectives and enriches the “value in use” approach. Full article
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Open AccessArticle
Construction and Empirical Research on the Dynamic Provisioning Model of China’s Banking Sector under the Macro-Prudential Framework
Sustainability 2020, 12(20), 8527; https://doi.org/10.3390/su12208527 - 15 Oct 2020
Cited by 1 | Viewed by 406
Abstract
Since the international financial crisis in 2008, to achieve the political goal of financial stability, academic circles, financial industry, and regulatory authorities worldwide have deeply reflected on the current economic regulatory theories and policy adjustment tools through introducing the macroprudential policy. The dynamic [...] Read more.
Since the international financial crisis in 2008, to achieve the political goal of financial stability, academic circles, financial industry, and regulatory authorities worldwide have deeply reflected on the current economic regulatory theories and policy adjustment tools through introducing the macroprudential policy. The dynamic provisioning system is a counter-cyclical policy tool in the macro-prudential adjustment framework widely used in the world. This paper uses the binary Gaussian Copula function to combine the measurement method of the default distance in the contingent claims analysis method with the risk warning idea based on the Probit model and proposes the contingent claims analysis (CCA)–Probit–Copula dynamic provisioning model based on nine forward-looking indicators. Based on China’s actual conditions, this model solves present problems faced by the current dynamic provisioning system in China, such as insufficient historical credit data reserves of commercial banks, excessive reliance on subjective judgments, and conflicts with the current accounting system. Moreover, this model can put forward corresponding counter-cyclical provisioning requirements according to the influence degree of macro-cyclical factors to different commercial banks’ own default risk, which not only takes into account the security and liquidity of commercial banks, but also ensures their profitability and competitiveness. Based on the empirical test of historical data from listed commercial banks in China, it proves that the dynamic provisioning requirements proposed in this model can effectively adjust the overall credit scale of the banking industry in counter-cyclical ways, thereby achieving the policy goals of counter-cyclical adjustment under the macro-prudential framework and maintaining the security of China’s financial system and the sustainable development of the macroeconomy. Full article
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Open AccessArticle
European Financial Services SMEs: Language in Their Sustainability Reporting
Sustainability 2020, 12(20), 8377; https://doi.org/10.3390/su12208377 - 12 Oct 2020
Viewed by 404
Abstract
In this study we concentrate on the segment of small companies in the financial sector in Europe. Services in this sector are developing rapidly and are not necessarily provided only by traditional banks and financial companies. Many nonfinancial companies provide financial services, and [...] Read more.
In this study we concentrate on the segment of small companies in the financial sector in Europe. Services in this sector are developing rapidly and are not necessarily provided only by traditional banks and financial companies. Many nonfinancial companies provide financial services, and this may open the sector to additional risk. In this context, the aspects of both financial and nonfinancial reporting are important and need to be taken into consideration as a whole to provide a complex picture of a particular institution. The goal of this paper is to analyze sustainability reporting according to the Global Reporting Initiative (GRI) by European financial services small and medium-sized enterprises (SMEs). First, we conducted a descriptive analysis of the features of nonfinancial information and its assurance, studying a sample of all European SMEs reporting according to the GRI from 2016 to 2018. Then, we chose only financial services SMEs to apply lexical analysis to their narrative reporting based on a corpus of 102,056 words. We conclude that nonfinancial information does not have the same importance as traditional financial information, and this sustainability reporting only complies with the minimum requirements. Thus, there is still a long way to go in this field. Full article
Open AccessArticle
Micro-Operating Mechanism Approach for Regulatory Sandbox Policy Focused on Fintech
Sustainability 2020, 12(19), 8126; https://doi.org/10.3390/su12198126 - 01 Oct 2020
Viewed by 434
Abstract
To determine the micro-operating mechanism(MoM) of enterprises participating in the regulatory sandbox policy in fintech, this study analyzes the structure of enterprise innovation competencies and derives relevant implications. The results reveal that large, middle-standing, and small and medium-sized enterprises focus on security, infrastructure, [...] Read more.
To determine the micro-operating mechanism(MoM) of enterprises participating in the regulatory sandbox policy in fintech, this study analyzes the structure of enterprise innovation competencies and derives relevant implications. The results reveal that large, middle-standing, and small and medium-sized enterprises focus on security, infrastructure, and user-related technology development, respectively, to enhance their innovation competencies. The security-related issues considered by large enterprises entail relatively high costs in initial technology development and are closely related to infrastructure building. Large enterprises are focused on developing overall security-related technologies, whereas middle-standing enterprises are striving to develop infrastructure-related technologies, with particular emphasis on elementary technologies. Small and medium-sized enterprises are also making efforts to develop user-centered technologies that can directly be used in fintech. As a method to implement regulatory sandboxes tailored to the needs of participating enterprises in South Korea, this study will help to determine the MoM of such participants and establish strategies to support them sustainably in terms of evidence-based policy. Full article
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Open AccessArticle
Macroeconomic Determinants of Nonperforming Loans of Romanian Banks
Sustainability 2020, 12(18), 7533; https://doi.org/10.3390/su12187533 - 12 Sep 2020
Viewed by 512
Abstract
The banking sector plays an important role in the development of any economy. The performance of the loans in bank portfolios is a critical issue for the banking sector. The increased number of nonperforming loans (NPLs) after the financial crisis of 2008 has [...] Read more.
The banking sector plays an important role in the development of any economy. The performance of the loans in bank portfolios is a critical issue for the banking sector. The increased number of nonperforming loans (NPLs) after the financial crisis of 2008 has questioned the robustness of many banks and the stability of the entire sector. Our study aims to present the most important aspects related to NPLs and to investigate some macroeconomic determinant factors affecting the rate of NPLs in Romania. Based on a set of data for the period 2009–2019, the analysis of NPLs was made using linear regression. The results showed that all selected independent variables (exchange rates of the most used currencies (EUR, USD and CHF), unemployment rate, and inflation rate) have a significant impact on the dependent variable NPL. The study reveals strong correlations between NPLs and the macroeconomic factors studied and that the Romanian economy is clearly connected to the quality of the loan portfolios. Additionally, an econometric analysis of the empirical causes of NPLs shows that the RON–CHF exchange rate has been the main factor in increasing the NPL ratio in the last 5 years in Romania. Full article
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Open AccessArticle
Detection of Financial Inclusion Vulnerable Rural Areas through an Access to Cash Index: Solutions Based on the Pharmacy Network and a CBDC. Evidence Based on Ávila (Spain)
Sustainability 2020, 12(18), 7480; https://doi.org/10.3390/su12187480 - 11 Sep 2020
Cited by 1 | Viewed by 863
Abstract
The ability to access quality financial services and cash has been indicated by various organizations, such as the World Bank or UN, as a fundamental aspect to guarantee regional sustainable development. However, access to cash is not always guaranteed, especially in rural regions. [...] Read more.
The ability to access quality financial services and cash has been indicated by various organizations, such as the World Bank or UN, as a fundamental aspect to guarantee regional sustainable development. However, access to cash is not always guaranteed, especially in rural regions. The present study is based in the Ávila region of Spain. A parameter called the “access to cash index” is constructed here. It is used to detect rural areas where the ability to access cash and banking services is more difficult. Based on the “access to cash index”, two sustainable solutions are proposed: The first (in the short term), based on extending access to cash, takes advantage of the existing pharmacy network. With this measure, a notable reduction of more than 55% of the average distance required to access this service is verified here. The second is based on the implementation of a central bank digital currency. Here, the results show an acceptance of 75%. However, it is known that elderly people and those without relevant education and/or low incomes would reject its widespread use. Such a circumstance would require the development of training and information policies on the safety and effectiveness of this type of currency. Full article
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Open AccessArticle
Peer-to-Peer Lending and Bank Risks: A Closer Look
Sustainability 2020, 12(15), 6107; https://doi.org/10.3390/su12156107 - 29 Jul 2020
Cited by 1 | Viewed by 552
Abstract
This study examined how the expansion of peer-to-peer (P2P) lending affects bank risks, particularly insolvency and illiquidity risks. We compared a benchmark case wherein banks are the only players in the loan market with a segmented market case wherein the loan market is [...] Read more.
This study examined how the expansion of peer-to-peer (P2P) lending affects bank risks, particularly insolvency and illiquidity risks. We compared a benchmark case wherein banks are the only players in the loan market with a segmented market case wherein the loan market is segmented by borrowers’ creditworthiness, P2P lending platforms operate only in the low-credit market segment, and banks operate in both low- and high-credit segments. For the segmented market case compared with the benchmark one, we find that, while banks’ insolvency risk increases, their illiquidity risk decreases such that their overall risk also decreases. Our results imply that sustainable P2P lending requires an appropriate differentiation of roles between banks and P2P lending platforms—P2P lending platforms operate in the low-credit segment and banks’ involvement in P2P lending is restricted—so that the growth of P2P lending is not adverse for bank stability. Full article
Open AccessArticle
Digital Transformation and Knowledge Management in the Public Sector
Sustainability 2020, 12(14), 5824; https://doi.org/10.3390/su12145824 - 20 Jul 2020
Cited by 3 | Viewed by 1253
Abstract
Digitizing public services is, at the moment, an essential necessity for numerous governments around the world. An improved government through digitization will not only have a growing effect on businesses, but it will also be able to intensify citizen engagement and push for [...] Read more.
Digitizing public services is, at the moment, an essential necessity for numerous governments around the world. An improved government through digitization will not only have a growing effect on businesses, but it will also be able to intensify citizen engagement and push for economic growth. During the last 10 years more countries have progressively begun to provide digital services to their citizens. Therefore, in order to address this development, the purpose of this paper is to analyze the evolution of the digital government literature in order to describe the aspects of digital transformation in the public sector and how it is related to knowledge management. In this study the methodology is quantitative and it is based on a review and a survey made with the main goal being the estimation from several collected data on how the digital transformation process in the Public Administration takes place and what its relationship is with knowledge management. The review study is based on articles found on Scopus database and it addresses the role that digital government research plays in the theory and practice of knowledge management. In the survey study, 54 employees working for the services of the two governmental areas of the Portuguese Ministry of the Environment were surveyed. The results show that the research on the theme is still at an exploratory stage due to the lack of studies relating digital government to knowledge management effectiveness in the public sector. The results also show that the success of digital government seems to be related with the quality of the organizations’ knowledge management, complementing each other for significant improvements in the public sector. In terms of originality, this study aims to contribute and stimulate data-driven discussions regarding the impacts of the digital transformation in the public sector and their relation with the implementation of knowledge management practices. The results offer insights into future research needs. Full article
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Open AccessArticle
Sustainable Financial Products in the Latin America Banking Industry: Current Status and Insights
Sustainability 2020, 12(14), 5648; https://doi.org/10.3390/su12145648 - 14 Jul 2020
Cited by 2 | Viewed by 1103
Abstract
The purpose of this study is to analyse the extant literature on sustainable financial products (SFP) with a comprehensive understanding of the status quo and research trends as well as characterise the existing SFP in the Latin America banking industry. In this way, [...] Read more.
The purpose of this study is to analyse the extant literature on sustainable financial products (SFP) with a comprehensive understanding of the status quo and research trends as well as characterise the existing SFP in the Latin America banking industry. In this way, research papers derived from Scopus as well as institutional reports such as main documents, sustainability reports, and product portfolios publicly available on webpages from public, private, and development banks are used to create a database of SFP where their main characteristics are included and classified. Based on the research trends identified, the results show the development of financial products focused on environmental, social, and government (ESG) matters, mainly from the credit side, of more sustainable financial markets and products under fintech ecosystems. The results show that because of regulatory and government support through mechanisms such as green protocols and social and environmental responsibility policies, private financial institutions of Brazil, Colombia, and Argentina have led the development of both social and green financial products. These study’s findings may be used for several policymakers to broaden the opportunities available in sustainable financing and thus, provide a roadmap that researchers and practicing professionals can use to improve their understanding of SFP. Finally, the study presents the potential for further research in the field, both with a qualitative and a quantitative approach. Full article
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Open AccessArticle
Effects of the Type of CSR Discourse for Utilitarian and Hedonic Services
Sustainability 2020, 12(12), 4821; https://doi.org/10.3390/su12124821 - 12 Jun 2020
Cited by 1 | Viewed by 535
Abstract
In a context of corporate social responsibility (CSR) communication, we explore whether the use of expositive versus narrative discourses interacts with the type of service commercialized by the company (utilitarian vs. hedonic) to determine consumer perceptions and responses to corporate communication. Our main [...] Read more.
In a context of corporate social responsibility (CSR) communication, we explore whether the use of expositive versus narrative discourses interacts with the type of service commercialized by the company (utilitarian vs. hedonic) to determine consumer perceptions and responses to corporate communication. Our main proposal is that, as representative examples of utilitarian services, banking companies would benefit significantly from communicating their CSR efforts with expositive discourses, whereas narrative discourses would be more adequate for hedonic services (e.g., catering). To test the research hypotheses, we use a 2 (expositive/narrative discourse) x 2 (utilitarian/hedonic service) between-subjects experimental design where we expose 302 consumers to different combinations of CSR messages and we evaluate changes in their message attributions and internal and external responses to them. The findings show that the interaction effect is significant and it works in the expected direction for issue importance, CSR fit, and CSR attributions. However, for CSR impact, attitude, trust, purchase, and advocacy intentions, the findings suggest that narrative discourses work better than expositive discourses both for utilitarian and hedonic services. No significant differences between types of discourses are observed for CSR motives, CSR commitment, and C-C identification and the interaction effect is also not significant for these variables. Full article
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Open AccessArticle
Toward a Quadruple Bottom Line: Social Disclosure and Financial Performance in the Banking Sector
Sustainability 2020, 12(10), 4038; https://doi.org/10.3390/su12104038 - 14 May 2020
Viewed by 689
Abstract
The present study aims to analyze the existence of a possible significant relationship between social disclosure and financial performance in banking institutions. This phenomenon was analyzed by considering the percentage of female executives on boards, and the implementation of the equal opportunity policy [...] Read more.
The present study aims to analyze the existence of a possible significant relationship between social disclosure and financial performance in banking institutions. This phenomenon was analyzed by considering the percentage of female executives on boards, and the implementation of the equal opportunity policy when it was applied. We used a sample of 61 banks from European Union countries (between 2015–2017), and sampling was environmental, social, or governance (ESG)-driven in order to capture the effect of non-financial disclosure provided by Bloomberg. A cross-section econometric model was built in order to examine the relationship between the percentage of female directors on boards and the equal opportunity policy. Both the independent variables of banks and performance indicators were adopted as dependent variables. Our study provides empirical evidence that while there is a lack of efficiency and performance when boards are fragmented, the enactments of equal opportunity policies create a good reputation for the firm and the positive performance of staff. The study aims to contribute to the ongoing debate on social sustainability and on the phenomenon of the glass ceiling, and provides political and entrepreneurial implications. Full article
Open AccessArticle
The Influence of IFRS Adoption on Banks’ Cost of Equity: Evidence from European Banks
Sustainability 2020, 12(9), 3535; https://doi.org/10.3390/su12093535 - 26 Apr 2020
Viewed by 650
Abstract
This study examines how mandatory adoption of International Financial Reporting Standards (IFRS) in European countries affects banks’ cost of equity. Supporters of IFRS argue that its adoption improves the quality of accounting information, which in turn decreases the cost of equity. However, banking [...] Read more.
This study examines how mandatory adoption of International Financial Reporting Standards (IFRS) in European countries affects banks’ cost of equity. Supporters of IFRS argue that its adoption improves the quality of accounting information, which in turn decreases the cost of equity. However, banking regulators could intervene in the implementation of new accounting standards to protect the stability of the banking system, which would deteriorate banks’ information environment and thereby increase the cost of equity. Using a regression analysis of European listed bank data, I find that banks’ cost of equity increases after the adoption of IFRS in countries with strong bank supervisory offices. I also find that strong legal enforcement and additional disclosure requirements jointly reduce banks’ cost of equity, but pre-IFRS inconsistencies between local accounting standards and regulatory standards jointly increase banks’ cost of equity. This study contributes to the literature on market discipline in banking and has policy implications: The findings suggest that, when implementing new accounting standards, potential conflicts between financial reporting and banking regulations should be considered. Full article
Open AccessArticle
Do Corporate Social Responsibility Disclosures Improve Financial Performance? A Perspective of the Islamic Banking Industry in Pakistan
Sustainability 2020, 12(8), 3302; https://doi.org/10.3390/su12083302 - 18 Apr 2020
Cited by 5 | Viewed by 1169
Abstract
This study aims to investigate the impact of corporate social responsibility disclosures (CSRD) on the financial performance of the Islamic banking industry of Pakistan. The study employed the method of content analysis for collecting the required data from annual reports of all four [...] Read more.
This study aims to investigate the impact of corporate social responsibility disclosures (CSRD) on the financial performance of the Islamic banking industry of Pakistan. The study employed the method of content analysis for collecting the required data from annual reports of all four full-fledged Islamic banks operating in Pakistan from 2012 to 2017. The study developed a novel comprehensive CSRD index by using the “Global Reporting Initiative” (GRI) and “Accounting and Auditing Organization of Islamic Financial Institutions” (AAOIFI). This index consists of five dimensions and 105 sub-dimensions of CSRD. The use of Ordinary Least Squares (OLS), Panel Corrected Standard Errors (PCSEs), and Generalized Least Squares (GLS) using random-effect (RE) and fixed-effect (FE) estimators revealed a significant negative relationship between CSRD and the financial performance of the sample firms. Regarding separate dimensions, the relationship of the Environmental and Economic dimensions of CSRD is significantly positive with current performance, but it is insignificant for the relationships of Legal, Philanthropic, and Ethical dimensions of CSRD with the current financial performance. In addition to contributing to the scarce literature in the Islamic banking industry of a developing country like Pakistan, the study will also help the policymakers and other stakeholders, including the AAOIFI, to develop a comprehensive CSRD policy or index and further improve the already established standards for CSRD. Full article
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Open AccessArticle
Multi-Attribute Decision Making Based on Stochastic DEA Cross-Efficiency with Ordinal Variable and Its Application to Evaluation of Banks’ Sustainable Development
Sustainability 2020, 12(6), 2375; https://doi.org/10.3390/su12062375 - 18 Mar 2020
Cited by 3 | Viewed by 617
Abstract
Multi-attribute decision making (MADM) is a cognitive process for evaluating data with different attributes in order to select the optimal alternative from a finite number of alternatives. In the real world, a lot of MADM problems involve some random and ordinal variables. Therefore, [...] Read more.
Multi-attribute decision making (MADM) is a cognitive process for evaluating data with different attributes in order to select the optimal alternative from a finite number of alternatives. In the real world, a lot of MADM problems involve some random and ordinal variables. Therefore, in this paper, a MADM method based on stochastic data envelopment analysis (DEA) cross-efficiency with ordinal variable is proposed. First, we develop a stochastic DEA model with ordinal variable, which can derive self-efficiency and the optimal weight of each attribute for all decision making units (DMUs). To further improve its discrimination power, cross-efficiency as a significant extension is proposed, which utilizes peer DMUs’ optimal weight to evaluate the relative efficiency of each alternative. Then, based on self-efficiency and cross-efficiency of all DMUs, we construct corresponding fuzzy preference relations (FPRs) and consistent fuzzy preference relations (FPRs). In addition, we obtain the priority weight vector of all DMUs by utilizing the row wise summation technique according to the consistent FPRs. Finally, we provide a numerical example for evaluating operation performance of sustainable development of 15 listed banks in China, which illustrates the feasibility and applicability of the proposed MADM method based on stochastic DEA cross-efficiency with ordinal variable. Full article
Open AccessArticle
The Effect of Emotional Intelligence on Turnover Intention and the Moderating Role of Perceived Organizational Support: Evidence from the Banking Industry of Vietnam
Sustainability 2020, 12(5), 1857; https://doi.org/10.3390/su12051857 - 01 Mar 2020
Cited by 13 | Viewed by 2102
Abstract
The objective of this study is to investigate the impact of emotional intelligence on turnover intention, noting the mediating roles of work-family conflict and job burnout as well as the moderating effect of perceived organizational support. Survey data collected from 722 employees at [...] Read more.
The objective of this study is to investigate the impact of emotional intelligence on turnover intention, noting the mediating roles of work-family conflict and job burnout as well as the moderating effect of perceived organizational support. Survey data collected from 722 employees at banks in Vietnam was analyzed to provide evidence. Results from the partial least squares structural equation modeling (PLS-SEM) using the SmartPLS 3.0 program indicated that there was a negative effect of emotional intelligence on employees’ turnover intention; this was mediated partially through work-family conflict and job burnout. Besides, this study indicated that perceived organizational support could decrease work-family conflict, job burnout and turnover intention of employees. It could also moderate the relationship between emotional intelligence and work-family conflict. This negative relationship was stronger for employees who work in a supportive environment. The main findings of this research provided some empirical implications for the Vietnamese banking industry. It implied that organizations in the service industry should try to improve their employees’ work-family balance, reduce job burnout and take advantage of these emotional balances and supportive environments to create beneficial outcomes. Full article
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Open AccessArticle
Digital Financial Inclusion and Farmers’ Vulnerability to Poverty: Evidence from Rural China
Sustainability 2020, 12(4), 1668; https://doi.org/10.3390/su12041668 - 23 Feb 2020
Cited by 4 | Viewed by 1162
Abstract
Access to finance is often cited as a key factor for sustainable poverty alleviation, but expanding access to the poor remains an important challenge for financial institutions. Much hope has, therefore, been placed in the transformative power of digital financial inclusion. However, evidence [...] Read more.
Access to finance is often cited as a key factor for sustainable poverty alleviation, but expanding access to the poor remains an important challenge for financial institutions. Much hope has, therefore, been placed in the transformative power of digital financial inclusion. However, evidence on the relationship between digital financial inclusion and poverty is limited. This paper is one of the first attempts to study the effects of digital financial inclusion on farmers’ vulnerability to poverty in China, using survey data on 1900 rural households. Vulnerability to poverty, here defined as the likelihood of poverty in the future, is measured by the Asset-Based Vulnerability model. In our survey, the proportion of farmers using digital financial services is 35.63%. Our estimations show that farmers’ use of digital financial services have positive effects on reduction in their vulnerability. We also find that such effects rely mainly on improvement in farmers’ ability to cope with risk, that is, alleviating their vulnerability induced by risk. Further investigation reveals that digital financial services provided by ICT companies have a larger impact on farmers’ vulnerability than that provided by traditional banks. The lessons learned from China’s digital financial inclusion is valuable for other developing countries where financial exclusion looms large. Full article
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Open AccessArticle
Non-Parametric Model for Evaluating the Performance of Chinese Commercial Banks’ Product Innovation
Sustainability 2020, 12(4), 1523; https://doi.org/10.3390/su12041523 - 18 Feb 2020
Viewed by 611
Abstract
A thorough analysis of commercial banks’ product innovation performance is essential to promoting bank product innovation capabilities and sustainable development. In this paper, the product innovation performance of commercial banks is defined as the conversion efficiency of input and output factors. The credit [...] Read more.
A thorough analysis of commercial banks’ product innovation performance is essential to promoting bank product innovation capabilities and sustainable development. In this paper, the product innovation performance of commercial banks is defined as the conversion efficiency of input and output factors. The credit risk of product innovation of banks is considered as an undesirable output and incorporated in the performance evaluation system. Depending on whether there is a synchronous relationship between innovation income and risks, a Fixed Correlation model (FCM) and a Variable Correlation model (VCM) are then constructed based on Data Envelopment Analysis (DEA) method for the evaluation of commercial bank product innovation performance. In addition, an output optimization model of the objective function is also constructed to estimate the target income of commercial banks’ product innovation in the FCM and VCM. Finally, the proposed model is applied to Chinese listed commercial banks for estimating the performance and target income of product innovation. Full article
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Open AccessArticle
Evaluation and Classification of Mobile Financial Services Sustainability Using Structural Equation Modeling and Multiple Criteria Decision-Making Methods
Sustainability 2020, 12(4), 1288; https://doi.org/10.3390/su12041288 - 11 Feb 2020
Cited by 2 | Viewed by 897
Abstract
Despite the fast emergent of smartphones in day-to-day activity, the sustainable development of mobile financial services (MFS) remains low partially due to online consumer’s trust and perceived risk. This research broadens the trust and the perceived risk at the multi-dimensional for understanding and [...] Read more.
Despite the fast emergent of smartphones in day-to-day activity, the sustainable development of mobile financial services (MFS) remains low partially due to online consumer’s trust and perceived risk. This research broadens the trust and the perceived risk at the multi-dimensional for understanding and prioritizing alternatives of MFS decision. A combined methodology; structural equation modeling (SEM) with two multiple criteria decision-making (MCDM) methods such as a technique for order of preference by similarity to ideal solution (TOPSIS) and analytic hierarchy process (AHP) were applied for data analysis. The two steps SEM-TOPSIS techniques were adopted through a two-types survey on datasets consisting of 538 MFS users, and 74 both experienced MFS users and experts in Togo. The SEM is used for causal relationships and assigning weights for the TOPSIS input. TOPSIS was applied for providing MFS alternative classification, in which the results were compared with prior research using the SEM-AHP technique on the given population. The results via SEM revealed particularly strong support for the dispositional trust and perceived privacy risk. Trust has a negative relationship with perceived risk. Except for perceived time risk, all the antecedents of perceived risk and trust validated the proposed relationship. The findings of TOPSIS uncovered that mobile money transfer (MMT) remains the core application used, followed by mobile payment (MP) and mobile banking (MB) and, therefore, consistent with AHP. However, the TOPSIS technique is better suited to the problem of MFS selection for this study field. This research offers a novel and practical modeling and classification concept for researchers, companies’ managers, and experts in the areas of information technology. The implications, limitations, and future research are provided. Full article
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Open AccessArticle
Analysis of Tail Dependence between Sovereign Debt Distress and Bank Non-Performing Loans
Sustainability 2020, 12(2), 747; https://doi.org/10.3390/su12020747 - 20 Jan 2020
Viewed by 890
Abstract
We investigate the tail dependence between sovereign debt distress and bank non-performing loans (NPLs) using a large sample of developed and emerging countries in recent decades. Considering the feedback loop of sovereign debt and bank loan distress, we use three copula models to [...] Read more.
We investigate the tail dependence between sovereign debt distress and bank non-performing loans (NPLs) using a large sample of developed and emerging countries in recent decades. Considering the feedback loop of sovereign debt and bank loan distress, we use three copula models to analyze the asymmetry of tail dependence structure between sovereign debt exposure and bank NPLs. We use the Gaussian copula marginal regression to control the concurrent impact of other macroeconomic variables. We provide evidence that sovereign debt indicates an important determinant of NPLs. We also find that there is tail dependence between sovereign debt distress and bank NPLs, whereas the tail dependence coefficients vary across countries. Our findings shed light on the influence of fiscal distress on bank loan distress and provide immediate implications for the design of macro prudential and financial policy. Full article
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Open AccessArticle
Industry-Specific and Macroeconomic Determinants of Non-Performing Loans: A Comparative Analysis of ARDL and VECM
Sustainability 2020, 12(1), 325; https://doi.org/10.3390/su12010325 - 31 Dec 2019
Cited by 2 | Viewed by 1340
Abstract
With the growth of an economy, the banking industry expands and the competitiveness becomes intense with the increased number of banks in the economy. The objective of this research was to discover the influence of industry-specific and macroeconomic determinants of non-performing loans (NPLs) [...] Read more.
With the growth of an economy, the banking industry expands and the competitiveness becomes intense with the increased number of banks in the economy. The objective of this research was to discover the influence of industry-specific and macroeconomic determinants of non-performing loans (NPLs) in the entire banking system of Bangladesh. We performed an analysis for the period from 1979 to 2018 by an autoregressive distributed lag (ARDL) model and checked the robustness of the results in the vector error correction (VEC) model. The outcomes of this research suggest that both industry-specific and macroeconomic factors influence NPLs significantly. Among the industry-specific determinants, bank loan growth, net operating profit, and deposit rates negatively impact NPLs with statistical significance while bank liquidity and lending rates have a significant positive affiliation with NPLs. Gross domestic product (GDP) growth and unemployment, among the macroeconomic variables, have a negative connection with NPLs. Whereas, domestic credit and exchange rates have a significant positive association with NPLs. The contribution of this research is that the outcomes found by means of econometric models can be used for predicting and measuring NPLs in upcoming years, not only for Bangladesh but also for developing and emerging economies. Individual banks, as well as the banking sector, by and large, can get a guideline from this research. Full article
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Open AccessArticle
How to Achieve Sustainable Development of Mobile Payment through Customer Satisfaction—The SOR Model
Sustainability 2019, 11(22), 6314; https://doi.org/10.3390/su11226314 - 11 Nov 2019
Cited by 1 | Viewed by 1402
Abstract
In recent years, due to smartphones being more popular and the wireless network infrastructure improving, individuals are no longer constrained by the workflow on personal computers. Therefore, business operators are constantly launching new mobile application services for everyday life. This study mainly explores [...] Read more.
In recent years, due to smartphones being more popular and the wireless network infrastructure improving, individuals are no longer constrained by the workflow on personal computers. Therefore, business operators are constantly launching new mobile application services for everyday life. This study mainly explores how mobile payment adopts the determinants, and adds utilitarian value, hedonic value and salesperson performance as antecedences to understand whether utilitarian value, hedonic value and salesperson behavior can affect satisfaction through determinants, as well as to understand consumers’ mobile payment usage intention through the stimulus-response model. The research objectives of this study are mainly mobile payment users in Taiwan. 425 valid questionnaires were received. This study uses a structural equation model to analyze the data. This study’s results indicate that utilitarian value, hedonic value and salesperson selling behaviors positively affects customers’ satisfaction, which customers’ satisfaction positively affects mobile payment usage intention. The research results could provide mobile payment operators with references in the design and implementation of the mobile payment and application process, thereby accelerating the popularization of mobile payment. Full article
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Review

Jump to: Research

Open AccessReview
Analyzing the Impacts of Financial Services Regulation to Make the Case That Buy-Now-Pay-Later Regulation Is Failing
Sustainability 2021, 13(4), 1992; https://doi.org/10.3390/su13041992 - 12 Feb 2021
Viewed by 303
Abstract
Fee-based Buy-Now-Pay-Later services (BNPL) are becoming widely adopted in many developed countries, including Australia. Across a variety of regulatory approaches there appears to be relatively minimal regulatory coverage of fee-based BNPL. This review applies a results-oriented, behaviourally informed market failure approach to assess [...] Read more.
Fee-based Buy-Now-Pay-Later services (BNPL) are becoming widely adopted in many developed countries, including Australia. Across a variety of regulatory approaches there appears to be relatively minimal regulatory coverage of fee-based BNPL. This review applies a results-oriented, behaviourally informed market failure approach to assess the regulatory outcomes of fee-based BNPL. The review makes the case that the impacts of the regulation of fee-based BNPL in Australia demonstrate multiple forms of regulatory failure. The regulatory failure is particularly due to regulatory capture at a broad level and especially in terms of a lack of consumer protections. Consumers may particularly need consideration and protection because understanding the increasing complexity and financial knowledge at the heart of many fintech services is beyond the capability or responsibility of the consumer. Incorporating social and consumer considerations into analyses of regulatory structures can enable analyses of the regulation of fintech and move financial services regulation toward providing more socially useful and sustainable financial services. In the future, a behaviourally informed approach to the regulation of fintech may be beneficial and enhance sustainability. Full article
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