Mobile Banking: Evidence of Improved Bank Performance in the UAE

International Journal of Economics and Management Studies
© 2020 by SSRG - IJEMS Journal
Volume 7 Issue 12
Year of Publication : 2020
Authors : George Owusu-Antwi, Patrick Ofei, Thomas Eveland
pdf
How to Cite?

George Owusu-Antwi, Patrick Ofei, Thomas Eveland, "Mobile Banking: Evidence of Improved Bank Performance in the UAE," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 12, pp. 47-55, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I12P107

Abstract:

The increased penetration of mobile banking is redefining banking operations in the UAE. This study examined the effect of mobile banking adoption on bank performance in the UAE by analyzing performance data spanning 2008 through 2016 from 15 selected banks. A random-effect model was applied using the pooled ordinary least squares method to estimate coefficients. The study found mobile banking adoption significantly negatively correlated with return on assets, implying that mobile banking adoption affects UAE banking performance. The analyses also showed a significant relationship between market share, expensesincome ratio, oil price, and mobile banking adoption. For banks, continuing to adopt mobile banking will be a key urgency going onward. It will help the banks advance their competitive advantages over other financial institutions and new entrants in the banking industry. This study provides scholars and practitioners with insights into how such adoption may impact bank performance.

Keywords:

Bank Performance, Banking Technology, Mobile Banking, Return on Assets, Banking Policy

References:

[1] Al-Jabri, I. M., & Sohail, M. S.. Mobile banking adoption: Application of diffusion of innovation theory. Journal of Electronic Commerce Research, 13(4), (2012) 379-391.
[2] Andriy, C., Electronic banking in Ukraine: the factors in decision making (MBA thesis). National University of Kyiv-Mohyla Academy, Kiev. (2001).
[3] Berenson, M.. Basic business statistics: concepts and applications (12th ed). London: Pearson. (2006).
[4] Bughin, J. E-pull or e-push? Laggards and first-movers in European banking, Journal of Computer-Mediated Communications, 7(1) (2001).
[5] Castillo, J. Mobile Banking Trends to Watch. Strands. (2018). Cherrayil, N.K. . Mobile banking is gaining traction in the UAE. The Gulf News Tech. (2014).
[6] Courchane, M., Nickerson, D. & Sullivan, R.J.. Investment in Internet banking as a real option: Theory and tests. The Journal of Multinational Financial Management, 12(4-5), (2002) 347–363.
[7] DeYoung, R., Lang, W.W., and Nolle, D.E.. How the Internet affects output and performance at community banks. Journal of Banking and Finance, 31(4), (2007)1033–60.
[8] Egland, K.L., Furst, K., Nolle, D.E., and Robertson, D.. Banking over the Internet. Quarterly Journal, 17(4) (1998).
[9] Furst, K., Lang, W.W., and Nolle, D.E.. Internet banking in the US: Landscape, prospects, and industry implications. Journal of Financial Transformation, 2, (2001) 45–52.
[10] Greene, W.. Econometric Analysis. Essex: Pearson Education Limited. (2012).
[11] Gujrati, D.N.. Basic Econometrics. New Delhi: McGraw-Hill. (2004).
[12] Hamilton, J. What is an oil shock? Journal of Econometrics, 113(2) (2003) 363–98.
[13] Harelimana, J. B. Impact of mobile banking on the financial performance of Unguka Microfinance Bank Ltd. Rwanda Global Journal of Management and Business Research. (2017).
[14] Hasan, I., Maccario, A., & Zazzara, C. Do internet activities add value? The Italian bank experience [Working Paper]. Berkley Research Center, New York University. (2002).
[15] Hesse, H., and Poghosyan, T. Oil prices and bank profitability: Evidence from major oil-exporting countries in the Middle East and North Africa. IMF Working Papers. (2009)
[16] Johnston, B., Bercum, M., and Piscini, E. Mobile banking: Aatalyst for improving bank performance. Deloitte Consulting. (2010).
[17] Kennedy, P. A guide to econometrics. Massachusetts: Blackwell Publishing. (2008).
[18] Khandelwal, P., K. Miyajima, & A. Santos. The impact of oil prices on the banking system in the GCC. IMF Working Papers. (2016).
[19] Kilian, L. The economic effects of energy price shocks. Journal of Economic Literature, 46(4), (2008) 871–909.
[20] Mbogo, M.. The impact of mobile payments on the success and growth of micro-business: The case of M-Peas in Kenya. The Journal of Language, Technology & Entrepreneurship in Africa, 2(1), (2010) 182-203.
[21] Molyneux, P., & Thornton, J. Determinants of European bank profitability: A note. Journal of Banking and Finance, 16(6), (1992) 1173–1178.
[22] Naceur, S. B. Determinants of the Tunisian banking industry profitability: Panel evidence. Journal of Frontiers in Finance and Economics, 5(1), (2003) 106–130.
[23] Owusu-Antwi, G., Banerjee, R., & Ofei, P. K. Ownership structure and bank performance: Empirical evidence from the UAE banking industry. Asian Economic and Financial Review, 8(12), (2018) 144– 148
[24] Pooja Malhotra, B. Determinants of Internet banking adoption by banks in India. Internet Research, 17(3), (2007) 323–339.
[25] Revell, J. Inflation and financial institutions. London: Financial Times. (1979).
[26] Rizvi, M. Residents are conducting one out of five bank transactions on their smartphone. Juniper Research. (2015).
[27] Rosen T. V. Branchless Banking in Kenya: Does Mobile Banking and Agent Banking have the potential to lift the welfare of low-income individuals? Lund University. (2013).
[28] Sohail, M. S., & Shanmugham, B.. E-banking and customer preferences in Malaysia: An empirical investigation. Information Sciences, 150(3-4) (2003), 207-217.
[29] Tchouassi, G. Can mobile phones really work to extend banking services to the unbanked? Empirical lessons from selected Sub— Saharan Africa countries. International Journal of Development Societies, 1, (2012) 70-81.
[30] Van Horne, J.C. & Wachowicz J.M. Fundamentals of Financial Management (11thed.). India: Pearson Education. (2001).
[31] Yang, S., Li, Z., Ma, Y., & Chen, X. Does electronic banking really improve bank performance? Evidence in China. International Journal of Economics and Finance, 10(2), (2018) 82–94.