Search Results (7)

This study examines the short-run and long-run equilibrium relationship between the banking sector’s efficiency and stability and its endogenous and exogenous determinants, such as inflation and international oil price shocks in Saudi Arabia from 2004 to 2022. This study differentiates between the direct and indirect effects of international oil price changes on bank efficiency and stability and investigates how these changes can affect the banking sector through inflation. The first stage uses a panel Autoregressive Distributive Lag (ARDL). The empirical result confirms a long/short-run relationship between oil price shocks and the stability and efficiency of banks. In the long run, the relationship is statistically significant and positive, and it is negative in the short run. On the other hand, this study finds that oil price shocks directly affect the stability and efficiency of banks. In the second stage, this study uses a nonlinear ARD (NARD) to examine the short- and long-run asymmetric impacts of oil price shocks on the stability and efficiency of banks by decomposing the oil price index into positive and negative changes. The findings confirm an asymmetric relationship between oil prices and the stability and efficiency of banks in Saudi Arabia. In addition, a positive change in oil price can affect the stability and efficiency of banks more than a negative one. Overall, the findings highlight the need for policymakers in Saudi Arabia to be vigilant in addressing potential risks arising from oil price fluctuations and to adopt appropriate policy measures to maintain stability and efficiency in the banking sector. Full article

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. Full article

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. Full article

Artificial Intelligence (AI) has proliferated in the last few years due to the vast data we pro-duce daily and available computing power. AI can be applied in many different sectors, such as transportation, education, healthcare, banking, and finance, among many others. The financial industry is rapidly embracing AI due to its potential for high-cost savings in financial services. AI could transform the financial sector by creating opportunities for tailored, faster, and more cost-effective services. Saudi Arabia is emerging as a fast-growing market in this industry with a strong commitment to technology-driven institutions. While AI is gaining prominence and receiving government support, it has not yet become a critical component for enhancing the efficiency of financial transactions. Limited published research on AI adoption in the Saudi Arabian financial industry calls for a comprehensive literature review to examine the current state of AI implementation in this sector. Therefore, this study explores the benefits, limitations, and challenges of leveraging AI in finance, highlighting the importance of ethical and regulatory considerations for successful AI adoption in the sector. This study’s findings reveal that research has been conducted on how AI improves processes in the financial sector by integrating critical components and efficient algorithms tailored to the industry’s needs. Based on these findings, this study proposes a sequential framework at the macro and micro levels of management to guide AI’s development and integration into the financial sector. Additionally, the framework draws insights from the existing literature to provide a detailed understanding of opportunities, challenges, and areas for improvement to maximize AI’s potential in the Saudi Arabian financial sector. Full article

Seeking the greatest possible return on long-term investments, investors naturally seek equities of the best-performing companies that fit their investment timeframe. Long-term investment success rests on selecting the best companies, which requires a challenging analysis reviewing voluminous and often-conflicting data about companies and understanding broader economic forecasts. This paper undertook a case study deployment of MCDM methodologies to examine the suitability and effectiveness of Multi-Criteria Decision-Making (MCDM) methods in assessing and ranking the best stocks for portfolio inclusion. A combination of MCDM techniques comprised a methodology to evaluate and rank Saudi Arabian banking stocks based on their performance in the Saudi stock market. Specifically, the paper combined the Best–Worst Method (BWM) and Ranking Alternatives by Perimeter Similarity (RAPS) for the analysis. BWM calculated each criterion’s relative impact (weight) in selecting a stock. RAPS then used the weighting to rank the results of the investigation. The study’s findings yielded encouraging results regarding using an integrated MCDM technique to derive optimal banking sector securities in the expansive Saudi stock market. The novel application of the robust RAPS technique combined with BWM encourages continued and increased use of MCDM techniques in financial matters and broader application in evaluating equities. Full article

Based on the social exchange theory, the current study aimed to develop and test a conceptual model that integrates the relationships among internal marketing dimensions (i.e., supportive and participative leadership, training and development, information and communication, and selection and appointment) and job satisfaction in the banking sector of Saudi Arabia, particularly during the COVID-19 pandemic. We collected data from 329 employees working in different private and public banks in Riyadh, Saudi Arabia. Overall, the findings confirmed the significant and positive effects of supportive and participative leadership, training and development, information and communication, and selection and appointment on employees’ job satisfaction. The current research contributes to the understanding of the broad role played by internal marketing practices in maintaining the job satisfaction of banking sector employees, during and possibly after the COVID-19 pandemic. Full article

FinTech is a disruptive international phenomenon that is expected to shape the future of the financial sector. This study describes the features and characteristics of the current Saudi Arabian FinTech landscape and ecosystem. Examples of innovative financial startups in Saudi Arabia, including online banking, transfer and payment services, crowdfunding platforms, peer-to-peer lending, and blockchain initiatives, are discussed. Several changes have occurred within the ecosystem in the last five years; for example, Saudi banks are taking a more cautious approach. However, FinTech initiatives are also being internally developed, encouraging technology companies and startups to focus their efforts on innovations aimed at improving current processes rather than novelty. The government directs its effort mainly toward initiatives related to regulations and laws. Customers are interested in new products that are convenient and easy to use. We compare the Saudi FinTech ecosystem to the United Arab Emirates’ FinTech ecosystem and conclude with recommendations for the different stakeholders. Full article