Issue #2 (Volume 16 2021 )

Excellence in strategic decision making is the driving force behind successful strategy adoption and implementation. However, it is becoming more and more complex as businesses emerge in unpredictable environments and conditions. The main objective of this study is to investigate the impact of cognitive bias and its dimensions (the illusion of control, prior hypothesis bias, escalating commitment bias and representativeness, and availability bias) on strategic decision making. In terms of methodology, the study used a random sampling technique. The study applied a survey as a research tool distributed among 138 bankers (employees at the managerial level) in managerial and administrative positions.
Further, descriptive analysis and regression analysis were used to analyze the data and test hypotheses. The results show a positive and significant effect of the illusion of control and representativeness. The results show that the illusion of control, prior hypothesis bias, escalating commitment bias and representativeness, and availability bias significantly impact the strategic decision-making in Jordanian banks. It is concluded that the null hypothesis will be accepted and, therefore, the alternative hypothesis will be rejected based on the significant levels for the primary and secondary hypotheses.
The factors of the escalating commitment bias, the availability bias, and the reasoning by analogy were not significant. Finally, the study recommends developing more literature on integrating psychology and discrimination and applying the research to different industries and managerial levels.

The development of the financial market and the transformation of the banking sector create a need for diagnostics of its financial security. This study is aimed at determining the level of the Ukrainian banking sector financial security in the event of decapitalization of the national economy. The paper uses multicomponent and behavioral analysis methods. The empirical study is based on Ukrainian data for 37 indicators by three components (for multicomponent analysis) and 23 indicators (for behavioral analysis). The study presents an improved algorithm for monitoring the level of Ukrainian banking sector’s financial security based on the calculation of the integral indicator. Only the system of “Financial results” indicators as the most significant component has relative independence from the other two components (“Financial stability” and “Macroeconomic stability”). According to assessments, in 2008–2017 Ukrainian banking sector’s financial security was 0,485-0,539; and in 2018 it became 0,626. The behavioral analysis of the partial integral indicator of the “Financial stability” component with the withdrawn assets located in offshore jurisdictions revealed the causal relation of the negative impact of capital outflow on the financial stability of the banking sector. This study has a practical value for determining the level of the banking sector financial security.

This study is aimed at determining the effect of expected effort and social influence factors on expected performance when using internet banking. The study adapts the constructs and definitions from the UTAUT model in the context of the adaptation of online banking technology. With regard to the nature of the variables analyzed, the following statistical tests and methods were used: calculation of average values using descriptive statistics; multiple linear regression analysis – to interpret associations between quantitative variables. Banks, as well as users of these banking services in the online environment, are the subject of research. The survey sample consists of 454 men and women and reflects the profile of online consumers across different countries of the European Union. The results of this study show the impact of the social influence construct on the respondents’ behavior when using electronic banking. The expected effort factor in the study significantly affects the expected performance factor, which can be characterized by original research, which showed that the effect of perceived ease of use on behavioral intent and use is incompatible with the degree of system complexity.

This study aims to investigate the relationship between the money supply (M1) and inflation in the Jordanian economy during the period of 1980–2019.
To achieve the goal of the study, the methodology of econometric analysis of time series was used through the following tests: Augmented Dickey-Fuller (ADF) test – to test the stability of the study variables, Johansen’s Cointegration Approach – to determine the long-term equilibrium relationship between the study variables, and the Granger Causality Test – to determine the direction of the causal relationship if it exists in the short term.
The study results demonstrate that inflation has stabilized at the level, while the money supply M1 was unstable at the level and stabilized after taking the first difference. The Cointegration test results indicated that there was no causal link between the money supply M1 and inflation in the long term. Finally, the results of Granger Causality presented a unidirectional causality running from the money supply M1 to inflation in the short term, meaning that money supply causes inflation, not vice versa; this means that the money supply M1 can explain the changes that occur in the consumer price index (CPI) in the Jordanian economy.
The study recommends that the monetary authority in Jordan should have greater control over the money supply due to its impact on the stability of the general level of prices, in order to avoid a repeat of the 1989 crisis represented by the sharp decline of the dinar exchange rate against other currencies and an increase in inflation that year to 25.6%.

In view of the expanding range of banking services in Ukraine, the issue of introducing innovative means of protecting consumers against illegal actions in the field of banking becomes relevant. This paper aims to determine the effectiveness of biometric technologies for customer identification during banking transactions, the legality of their use, and to identify areas for the development of state policy focused on the legal use of biometric data in order to protect the rights and legitimate interests of individuals and legal entities. Based on analysis and systematization of scientific publications and regulatory framework, it was found that a potential direction for banks to implement the customer focus concept in their services to establish the appropriate level of security is the use of biometric technologies that ensure the proper storage of personal data. The summarized information on the actual application of biometric identification methods in the banking sector allows stating that the factors stipulating the criminal offenses using biometric data can be neutralized by the subjects of counteracting such offenses and through effective legal remedies. Contradictions arising between the state of regulatory support and the actual needs for the use of biometric technologies in the field of banking in Ukraine decelerate the use of effective security tools with a high degree of reliability in the banking sector. It is concluded that further implementation of biometrics in the banking sector in Ukraine requires a comprehensive approach and consideration of the best world practices.

While financial inclusion is seen as a goal of socio-economic development, there is still no clear understanding of how to measure it. Following this concern, the paper deals with the computation of the financial inclusion index of the Ukrainian economy using an annual dataset spanning from 2008 to 2020 and following the Sarma methodology. The object of the study is a set of indicators of usage, access and quality of financial products and services. The obtained results demonstrate the medium level of financial inclusion. The improvement of financial inclusion is observed in 2012, 2013, 2020 (namely 0.55 – 0.56 in the range of 0 and 1). From 2015 (0.38) till 2018 (0.39), the revealed downward trend affirms that the withdrawal of banks from the market has deteriorated the level of quality and usage of financial products and services. Financial inclusion declined during the cleaning up of the banking system in 2014–2016, just as it did after the global financial crisis in 2009–2010. Despite the development of the payment infrastructure, there is a need to diversify access, increase quality, and quicken the usage of financial products and services due to existing distrust in national financial institutions. Improving financial literacy and consumer protection, and closing regulatory gaps in the non-banking sector are seen as ways to enhance financial inclusion. Thus, financial regulators should establish an upward trend in financial inclusion that will ensure full access to formal financial services and will not adversely affect the stability of financial system.

The paper aims to assess the influence of bank lending on the performance of enterprises in the real sector. The relevance of the study for different countries, including Kazakhstan, Kyrgyzstan and Ukraine, is shown. Structural equation modeling of the impact of bank lending on the performance of enterprises in the real sector is carried out using Ukraine as an example. Six key indicators of real sector enterprises’ performance for the period of 2007–2019 were selected as an information basis of the study. To assess the abovementioned impact, structural equation modeling was used, i.e., the Statistica program was selected as a software tool to evaluate the resulting model’s adequacy and determine the level of statistical significance of its parameters. The obtained results prove that the business lending sector in Ukraine has significant potential for its development, which ultimately will have a positive effect on the efficiency of the real sector enterprises. Moreover, adopting a balanced state policy in the sector of corporate bank lending can give impetus to the development of the domestic sector of real production and help Ukrainian enterprises overcome the crisis caused by COVID-19.

The COVID-19 outbreak has had a severe impact on nearly all industries, including Islamic banking, which plays a significant role but is exposed to higher risk. This study aims to evaluate the credit risk that Islamic banks in Indonesia have been exposed to related to home financing before and during the COVID-19 outbreak. Panel data are employed covering the period January 2016 to September 2020 on a monthly basis. The data were analyzed using a dynamic panel approach to present a distinct picture of Sharia-compliant property financing before and during the COVID-19 outbreak. In general, the findings show that the macroeconomic variable reflected by regional inflation has had a different influence in the two periods, with Islamic banks having had much more exposure to macroeconomic risk, specifically in home financing, during the epidemic. In addition, the different influences are also shown by the study results, which show that provinces on Java Island face less risk exposure than those outside Java. In terms of impulse response factors and variance decompositions’ result, before the outbreak, the response of home financing risk to inflation tended to be more stable. However, during the outbreak, the movement has tended to fluctuate more, especially outside Java Island. The same result for variance decompositions shows a similar trend, with inflation tending to have a larger impact during the outbreak.

Acknowledgments
We are grateful to the Direktorat Penelitian dan Pengabdian Masyarakat (DPPM) Universitas Islam Indonesia No. 001/Dir/DPPM/70/Pen.Unggulan/XII/2020 for support and providing a research grant for the study.

This study aims to examine the influence of corporate social responsibility (CSR) disclosure determinants on profitability of Yemeni Islamic financial institutions. The empirical study was based on a balanced panel for twelve years from 2005 to 2016. Banks’ profitability is measured by four indicators such as return on assets (ROA), return on equity (ROE), profit after tax (PAT), and earnings per share (EPS), while corporate social responsibility, financial leverage, inflation rate, asset size, and age of Islamic banks are considered as independent variables. The results of this study with regard to ROA indicated that corporate social responsibility, asset size, inflation rate, and age of Islamic banks have a significant influence on profitability (ROA). With respect to ROE, the result indicated that financial leverage, asset size, and inflation rate are the most important variables affecting bank profitability (ROE). Concerning PAT, the outcome revealed that financial leverage and age of Islamic banks have a significant effect on profitability (PAT). Finally, the result with respect to EPS indicated that financial leverage, asset size, inflation rate, and age of Islamic banks have a significant impact on bank profitability (EPS). The result will be beneficial to scholars, investors, stakeholders, managers, and policymakers in the Islamic financial sector.

The banking system, which has been the fulcrum of funding for Nigeria’s economy, is plagued by instability in the face of a growing amount of non-performing loans. This is examined in the current milieu of the need for funding the Sustainable Development Goals (SDGs). Using a number of proxies for SDGs 8 and 9, annual time series data covering 1992 to 2019 were used with variables such as GDP per capita, commercial banks’ loans to small-scale enterprises, banking system stability indicators and liquid assets to total assets of banks. The study utilized the Autoregressive Distributed Lag. Findings showed that banking system stability has a significant positive effect on funding the SDGs 8 and 9 beyond the five per cent level of significance within the study period. Non-performing loans remained negative throughout the study. The result suggests that banking stability would enhance funding of the SDGs, and banks would be stable if they finance the SDGs. The policy implication explains the importance of banks actively pursuing opportunities to build sustainable enterprises and developing strategies that will enable their core banking business to be more venture-driven rather than consumer-oriented. In conclusion, there is a need to completely eliminate or reduce the quantum of non-performing loans from the system and establish a regulatory framework that will facilitate its expected role of intermediation in the economy profitably and successfully.

Acknowledgment
The authors would like to appreciate Covenant University for financial support to publish this paper.

Corporate social responsibility is the development trend in globalization. Businesses need to be accountable to shareholders. An organization should handle the relationship between community, economic, and social factors. The disclosure of responsibility accounting information by businesses has important implications for information users as well as stakeholders. The paper is intended to verify the influence of profitability on the disclosure of responsibility accounting of all listed commercial banks in Vietnam. The paper employs time series data for 2015–2019 and uses the ordinary least square method to test the model. Five independent variables related to profitability are examined. The results of the study show that ROA and ROE have a positive influence on responsibility accounting disclosure. Thereby, the state agencies of Vietnam need to promulgate regulations of responsibility accounting disclosure according to international standards and strictly control the disclosure of Vietnamese commercial banks to improve the quality of the information in the context of international integration.

Every amendment to the Bank Indonesia Law is caused by a situation that requires changes to the Law regulating the Central Bank in Indonesia as a solution. The spread of COVID-19 in Indonesia has also led to proposals to amend the Bank Indonesia Law. The purpose of the study is to find answers to the relevance of the proposed Amendment to Bank Indonesia Law to address the spread of COVID-19 to banking institutions in Indonesia. This type of research methods is normative legal research. In normative legal analysis, secondary data are used, consisting of primary and secondary legal materials. They are obtained from applicable regulations in Indonesia. The study results show that every change is always based on events that prove the weak implementation of existing rules with a regulatory and conceptual approach. The spread of COVID-19 is a situation, that has no practical basis and requires amendments to the Bank Indonesia Law as an alternative solution. Also, the proposed amendments are not yet relevant to address the impact of COVID-19 on banks because they have not yet realized and achieved the legal goals of providing benefits to the community.

Acknowledgment
Thanks to Universitas Atma Jaya Yogyakarta, Indonesia, for providing funding for research and publication.

This study seeks to verify the contribution of internal audit (IA), especially its role in improving financial performance in Yemeni commercial banks, with a specific focus on three factors, namely: the independence and objectives of IA, the quality of IA and the size of IA. This study reviews some existing literature on the contribution and role of IA in improving financial performance. It relies on available data from questionnaires. 90 questionnaires were distributed to nine commercial banks in Yemen (23 branches) working under the supervision of the Central Bank of Yemen; 81 questionnaires (90%) were regained and used in the process of analysis. To analyze the data, three analysis approaches were used, including description, correlation, and regression. The results showed that the IA has a significant impact on the overall performance of Yemeni commercial banks. Furthermore, the results showed that the auditors’ efficiencies, as well as their financial and accounting experiences, have a significant and positive impact on financial performance. It was revealed that the independence and objectivity of internal auditors are highly insignificant for financial performance. However, the size of IA and the frequency of the auditors’ meetings have a negative and significant effect on financial performance. This study provides some recommendations for improving the effectiveness of IA, which in turn will contribute to improving financial performance.

Over the past three decades, the relative bank loan demand has changed due to the arising small and medium-sized enterprises (SMEs). Therefore, banks in their operations face the problem of processing an ever-increasing number of loan applications.
The aim of this paper is to develop an auxiliary approach to assessing the prior creditworthiness of long-term SME projects with nonstandard cash flows.
This study reveals how the principles of value-based management can be incorporated into the process of borrower’s creditworthiness assessment to improve the process of screening loan applications. For this, the internal rate of return was used as a criterion for loan granting decision at the initial stage of loan underwriting.
An algorithm for the preliminary evaluation of loan applications is proposed and is based on the principle of maximizing the shareholder value of banks. This algorithm helps to define the credit terms taking into consideration the distribution of positive cash flows throughout the project’s expected economic life, calculate the possible real effective interest rate concerning the borrower’s nonstandard cash flow schedule, make a rough analysis on the economic efficiency of lending and state the necessary criterion to initiate the procedure of loan underwriting for the projects with nonstandard cash flow schedules.
The proposed estimation algorithm stemming from the IRR-approach for the cash flow analysis can also be initially used by a borrower as a tool for credit solvency self-testing via screening of periods with corresponding cash flows that can be used for loan servicing.

This article uses an event study to investigate the response of a bank’s stock price to information related to these banks’ top managers. In the first event, the Vice Chairman of the founding board of Asia Commercial Bank (ACB) was arrested and the Chief Executive Officer (CEO) of this bank was summoned by the police for questioning. The second event related to the immediate resignation of the Chairman of the Board of Directors of Sacombank (STB) after he received a summons from the investigating police agency. Both of these events happened in Vietnam. The research results showed that unanticipated events (the first event) caused the share prices of both banks to react more strongly, and the impact time was longer than the second event. The first event resulted in the cumulative abnormal returns of ACB and STB being –23.6% and –9.1%. The second event has been found to be directly related to STB, but does not significantly affect this stock, but has a significant effect on the abnormal return of ACB (AR (1) = –4.6%). Asymmetric information, inattention and investor fear of event-related losses may explain this phenomenon.

The number of Muslims in Indonesia reaches 85% of the total population of 270 million, but the progress of the Islamic economics in the country is stagnant. This is evidenced by the sharia banking assets, which only reach 5% and never increase every year. Therefore, it is necessary to investigate the primary obstacles hindering the development of sharia banking, from the perspective of sharia banking per se, and not from the society, as was the case in most previous studies. Besides, this study offers a strategy through a combination of Ibn Khaldun’s ashabiyyah and social construction theory of Peter L. Berger and Thomas Luckmann to strengthen the public perception toward sharia banking. The method used to reveal the obstacles is a field survey method in the form of an obstacle’s questionnaire with optional answers, which were distributed to several Islamic banks as samples, and then the most selected answers are calculated. Meanwhile, to find a strategic solution, it is necessary to review the literature using a philosophical approach. The results of a questionnaire that was distributed to several Islamic banks indicate three primary obstacles: low level of public awareness about the use of sharia banking (80 %), low level of public understanding and knowledge on sharia banking products (60 %), and low level of government support for sharia banking (40 %). Meanwhile, the theoretical application of asabiyyah theory with the help of the social construction theory can be used to strengthen public perceptions of Islamic banking through a three-stage process: externalization, objectivation and internalization.

The aim of the study is to compare credit risk between commercial and Islamic banks in Palestine. The study uses five commercial banks and two Islamic banks, so the Merton model is used to test the hypothesis regarding the research question. Also, cumulative logistic probability distributions are used to derive the probability of default from distance to default. The findings show that commercial banks encompass less credit risk than Islamic banks. Thus, the study recommends that financial institutions in Palestine master management skills and operational systems to cope with the financial environment. They need to increase research and training programs in risk management. Besides, there is a need to reduce lending to public sector (government). There is also a need for a focus on mergers, especially for smaller banks, to increase their capital, so that there are banking units that can compete in providing better customer services and contributing to the stability of the banking sector.

Acknowledgment
The author is thankful to Palestine Technical University – Kadoorie for funding this research.

Despite the surge of studies on employee achievement motivation, there is little research that looks at the combination of self-efficacy and social adjustment as predictors of achievement motivation in Nigeria. Hence, this paper examines the influence of self-efficacy and social adjustment on achievement motivation in Nigeria’s banking industry. The study’s sample was drawn from six banks (Guarantee Trust Bank, First Bank of Nigeria, United Bank for Africa, Ecobank, First City Monument Bank, and Access Bank) in Ibadan, Oyo State, Nigeria. Also, it assumes a quantitative research approach. In this study, questionnaires were distributed randomly, and out of 200 questionnaires, 149 were suitable for analysis. Hence, the analysis was completed using the SPSS version 26. The results of this paper reveal that self-efficacy provided about 22% of influence and social adjustment about 82% of the influence on variance in achievement motivation among bank employees. Further results showed that gender, marital status, educational qualification and work experience have a significant and independent influence on achievement motivation among bank employees. The findings denote that increased levels of self-efficacy and social adjustment significantly predict achievement motivation. Therefore, human resource managers in Nigeria’s banking industry should always consider the psychosocial factors of employees, which will help management to know the practical measures and motivating conditions that are useful for enhancing achievement motivation. Also, banking industry managers should train employees in social adjustment skills that will help them managing their life achievements.

Acknowledgment
The Department of Industrial Psychology and People Management, College of Business and Economics, University of Johannesburg, under Professor Wilfred Ukpere is acknowledged, in funding this study and its publication.