Issue #1 (Volume 18 2023)

Religiosity is one of many essential aspects that stands as the motivation of people’s behaviour. Its importance expands to the field of banking, especially Islamic banks that take Islamic teaching as their backbone. This study aimed to seek religiosity motivation among Islamic bank depositors by exploring the possible asymmetric effect of interest rates on the type of deposits. By using the NARDL approach, this study investigates the relationship between the conventional deposit interest rate on the type of depositors and deposit maturity by using monthly data from April 2015 until March 2020 of Indonesia’s Islamic banks. The results show that government deposit in Islamic bank is not affected by the raise of interest rate. In addition, all deposits that showed the possibility of asymmetry effect indicated that the increase of interest rate (LIR+) has a positive coefficient. In general, Indonesian Islamic bank depositors’ are religiously loyal and not attracted to the fluctuation of interest rates. The result also found that short-run asymmetric dynamics show convergent to long-run asymmetry after an average of 15 months. As for the policy implications, stakeholders must ease the regulation of Islamic banks such as the conversion of conventional banks to Islamic banks, since it is proven that customers are mainly religiously driven.

The main purpose of this paper is to examine the impact of business enablers and financial technology (Fintech) on the banking industry in order to determine whether it is an opportunity or a disruption. The applied research design is quantitative, and the hypotheses and the model were tested. To achieve the objectives, the study used a questionnaire to collect data. 150 managers in Saudi Arabia banks were surveyed. The participants provided 130 substantial and valid responses, and the PLS-SEM technique was used. Based on the analysis, it was concluded that the presence of business enablers facilitated Fintech progress, which led to the increase in bank performance, from the economic, social and environmental point of view. In addition, Fintech also plays a mediating role, by increasing the positive impact of business enablers. Therefore, Fintech provides several opportunities, not a disruptive technology, for the banking industry. The research paper explains the importance of Fintech progress in Saudi Arabian banking. Many have viewed Fintech as a disruptive technology, but this study found that it presents various opportunities for the Saudi Arabian banking industry.

This study examined the direct effect of brainstorming on fraud risk assessment at credit card issuing banks in Indonesia. Therefore, it was expected to help improve their performance in dealing with various credit card frauds. This study involved 80 participants from the credit card fraud risk management team from four major credit card issuing banks in Indonesia, consisting of the risk management team (anti-fraud specialist) and the internal auditor team. The research was analyzed using the experimental method with a 2X1 factorial design. Analysis of Variance (ANOVA) would test the experimental data. The individuals’ performance (without brainstorming) or the brainstorming group was analyzed using the statistical ANOVA technique. ANOVA analysis produced a sig value of less than 1% and an F-count of 50.556 > 0.143443, which was higher than the F-table. The ANOVA test results concluded that there were differences in assessing the fraud between the respondents with brainstorming and those without it. Through the brainstorming method, it turned out that the respondents in the fraud risk management team provided a more accurate credit card fraud risk assessment from the point of view of the fraud causes and the credit card fraud impacts.
Hence, it is crucial for credit card issuing banks in Indonesia to consistently implement anti-fraud governance by adopting brainstorming to produce a better fraud risk assessment.

Acknowledgments
This research was conducted as part of the process of study completed at the University of Padjadjaran, Bandung, Indonesia. Very special thanks to the participants from major credit card issuer banks who have participated in this research.

A country’s payment and settlement system refers to payment means or instruments, procedures, supportive and technical services of clearance, fund transfer, and final settlement. To study the various dimensions of the payment and settlement system, an online survey was administered and 240 responses were collected from Saudi and non-Saudi nationals, while secondary data were obtained from the SAMA (Saudi Arabian Monetary Authority) website. Index numbers, percentages, ranks, Average Trend Growth Rate, and payment weights means are applied to get the mutual growth trend, average growth, and contribution of specific means in payment and settlement in Saudi Arabia. There are negative trends in the traditional payment and settlement system in Saudi Arabia. Based on the value (amount) of transactions, Mada (Debit card) and E-payment (SADAD – a payment system, and SARIE – Saudi Arabian Riyal Interbank Express) are the most significant contributors to online payment (51.63%), while POS (point of sale) is the fastest-growing (158%) means of payment and settlement in Saudi Arabia. The means of traditional payment and settlement negligibly (< 1%) contribute to the payment and settlement system in Saudi Arabia. The analysis of responses reveals that payment and settlement users were unsatisfied with the various dimensions of security (39%) and traceability (35%) of the payment and settlement systems in Saudi Arabia. All dimensions of security and traceability must be considered to increase the degree of satisfaction with payments and, in particular, settlements in Saudi Arabia.

Acknowledgment
The authors are grateful to the Deanship of Scientific Research, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia, for providing funding to complete this project (Project No. 2021/02/18709).

Financial statements of Vietnamese commercial banks must be audited annually by an auditing firm according to the Government’s regulations. This study identifies factors associated with firm performance and external audit selection. The decision to choose an auditing firm is considered an intermediate variable to determine the degree of impact of some factors on the performance of commercial banks. This study was conducted by interviewing 265 managers holding high positions as CEOs and CFOs at 30 commercial banks in Vietnam. The non-probability sampling method was applied. The survey was produced using Google Forms and sent directly to participants. Structural Equation Modeling (SEM) is applied to test hypotheses. The results show that except for the complexity of a firm, the factors such as legal environment, audit fees, audit firm size and reputation, bank governance, audit experience, and relationship positively impact external auditor selection. Besides, external auditor selection significantly affects firm performance. This study’s conclusions from the viewpoints of bank managers open the door to promising and timely future research. It is necessary to deepen and broaden academic understanding of the ideas and determining elements influencing external auditor selection and firm performance. More research is needed to fully comprehend this problem and move towards a policy solution.

Bank stakeholders, such as creditors, investors, regulators, and other bank stakeholders, expect continuous performance improvement. To achieve this goal, bank managers can use information technology (IT) as a strategic resource to improve their bank’s capabilities and accordingly gain competitive advantage. In this study, the profitability and efficiency of commercial banks in Jordan are compared to investment in information technology (IT). Return on equity (ROE), return on assets (ROA), and net interest margin (NIM) are used to measure bank profitability while controlling for bank size and financial leverage. Cost efficiency is measured using the cost efficiency ratio. The study sample consists of 13 commercial banks listed on the Amman Stock Exchange between 2010 and 2021. To determine the relationship between the variables, descriptive statistics, correlation analysis, the panel least squares approach, and fixed effects multiple regression models are used. The findings show that banks, on average, spend 0.61 percent of their total assets on information technology (hardware and software). Additionally, banks that invest in IT are predicted to perform better over time, as evidenced by their increased profitability and efficiency. Small banks have more IT investment as a percentage of assets than larger banks. In comparison to highly leveraged banks, less leveraged banks typically have a greater IT investment to asset ratio (0.69%). The findings show that profitable banks (measured by ROE) invest more than 1.1% of their total assets in IT. Meanwhile, highly efficient banks also invest more in IT (0.65%) compared to less efficient banks.

Acknowledgment
We are indebted to the Middle East University (MEU) - Jordan ) for the financial support needed for this article.

The COVID-19 pandemic has affected economies around the world, including the banking industry, and this depends on various factors. The aim of this study is to understand the influence of COVID-19 independently and through the moderation of bank capital ratios on changes in loans of Association of Southeast Asian Nations 5 (ASEAN-5) banking industry players. The study uses a sample of 86 banking companies listed on the stock markets of Indonesia, Malaysia, the Philippines, Singapore, and Thailand from the first quarter of 2018 to the fourth quarter of 2020 by employing the panel data regression technique. The results showed that COVID-19 had a significant negative effect on changes in bank lending. However, a bank’s capital ratio was not found to play a role in moderating the effect of COVID-19 on changes in bank lending. These findings have three main implications: (i) the role of the government in recapitalization and liquidity injection can eliminate differences in behavior between banks with the classification of capital ratios; (ii) there are no signs of zombie lending in ASEAN-5’s banking industry; and (iii) regulating incentives to change bank lending behavior in future crises must take into account that bank capital categorization will not be effective.

Acknowledgment
This study was made possible with the support of a research grant by Universitas Indonesia number NKB-533/UN2.RST/HKP.05.00/2022.

The pandemic and wartime in Ukraine confirmed the importance of cashless payments for financial stability. The purpose of the paper is to examine the effect of technological infrastructure and financial access factors on cashless economy development. The impact of the infrastructure factor is assessed in case of Ukraine, using NBU’s data on payment infrastructure during 2001–2022. The hypothesis of the boosting effect of financial access towards a cashless economy has been tested using the method of correlation between M0/M3 and different indicators of financial access (usage of essential technologies, financial services) based on data of World Bank, IMF, and Triple-A in 2021.
The study’s results show that globally there is an almost linear relationship between the number of open financial accounts and the increase in the level of cashless (0.954). It is also revealed that the rise of the share of the population making electronic payments decreases the share of cash in the economy. It is determined that the spread of the crypto-assets has a significant impact on the reduction of cash in the economy (an increase in the share of the population operating with cryptocurrencies by 1% reduces the share of cash by 0.5%). Regarding regulatory policies, it is proposed to stimulate the coverage of the population with open financial accounts, making mandatory payments with electronic payment systems and developing their infrastructure.

This study investigates the role of brand loyalty in South African banking. More specifically, the study identifies brand loyalty factors in South Africa’s banking industry. Brand loyalty can significantly impact a bank’s competitiveness. Loyal customers do not switch banks and use more banking products; this earns a better income for a bank in the long run (such as home loans). The study’s primary aim is to identify factors of brand loyalty in South African banks. Data were gathered from South African banking customers using a Google Forms digitized format questionnaire with a 5-point Likert scale. More than 1,000 questionnaires were distributed, and 150 completed questionnaires were returned (representing a 15% response rate). The results show that the data are suitable for multivariate analysis. It has an adequate sample (Kaiser, Meyer and Olkin measure > 0.70), acceptable sphericity (p ≤ 0.05), and satisfactory reliability (α ≥ 0.70). The exploratory factor analysis identified four factors explaining a cumulative variance of 55%. These factors are: 1) customer service and satisfaction (34%); 2) negative publicity (7.5%); 3) regulatory compliance and trust (7.1%); and 4) trust and reputation (6.5%). South African bank managers can use the results to focus their brand loyalty strategies on their quest to be more competitive to face the strong competition in the banking industry.

Recently, the management of the green financial sector has been widely influenced by global socio-economic concerns such as the COVID-19 pandemic and the energy crisis. The purpose of this paper is to evaluate, besides their environmental attitude, what opinions and experiences the affected stakeholders have about the sustainability-related processes in the Hungarian banking sector in the early 2020s. To assess this subject extensively, two questionnaire surveys were conducted in two consecutive years (2020/2021 and 2021/2022), involving 600 and 1,600 participants randomly chosen from banking databases, respectively. The results indicate that both residential and corporate participants have various but broadening knowledge of green financial instruments. Hungarian residential customers have pointed out the inconveniences of the most popular green loan product (Green Home Program), while there appears a distinct difference in green investment preferences between the two groups of respondents. Hungarian stakeholders are quite eco-conscious, and so are banks adopting sustainability and climate risk assessment actions, however, the implementations have much potential to exploit. Respondents also identify the energy crisis-related risks, while their trust in the banking system remains high even under volatile circumstances. These findings demonstrate that the Hungarian green banking sector has a high degree of crisis resistance with residential and corporate stakeholders behind giving trust and thereby the driving force toward the successful green transition.

The crumble of financial markets due to the recent crises has wobbled precariousness in the stock market and intensified the returns vulnerability of banking indices. Against this backdrop, this study intends to model the volatility of the Indian Bank Nifty returns using a battery of GARCH specifications. The finding of the present research contributes to the literature in three ways. First, volatility during the sample period, which corresponds to a time of stress (a bear market), is more persistent, with an estimated coefficient of 0.995695. Moreover, when volatility rises, it persists for a long time before returning to the mean in an average of 16 days. Second, for a positive γ, the results insinuate the possibility of an “anti-leverage effect” with a coefficient of 0.139638. Thus, the volatility of the Bank Nifty returns tends to rise in response to positive shocks relative to negative shocks of equal magnitude in India. Finally, the findings demonstrate that EGARCH with Student’s t-distribution offers lower forecast errors in modeling conditional volatility.

Bank stakeholders such as investors, creditors, and other stakeholders of a bank, expect full disclosure to evaluate banks’ financial statements. To achieve this goal, bank managers can increase the value of a bank by enhancing the return on their investments. This study examines the impact of financial performance on the market value of Jordanian public shareholding banks. The study model examines the effect of return on investment (ROI), debt ratio, dividend policy, and current ratio while controlling for bank size. Bank value is measured using the market value. The sample is Jordanian banks listed on the Amman Stock Exchange between 2005 and 2020. To investigate the link between the study variables, the random effect model, panel least squares approach, correlation analysis, and descriptive measures are used. The findings indicate that banks own 3.025 JD from current assets for each JD from current liabilities. In addition, the debt ratio is 38.4% from total assets. Adj R2 for the study model is 22.1%. The results show that profitability, leverage, and bank size significantly affect the value of Jordanian banks, while dividend policy and liquidity do not have a significant impact.

Islamic banks have become alternative intermediary institutions in the banking industry and are expected to play a significant role in the financial system. Therefore, this study aims to examine Islamic banks’ contribution to financial stability, also focusing on the underlying contracts implemented in financing activities from the perspective of a non-linear relationship. The study employs time-series data from 2006m1 to 2021m11 and adopts non-linear autoregressive distributed lag (NARDL). The findings reveal that the presence of Islamic banks has a non-linear influence on financial stability. Overall financing has a symmetric effect on financial stability, but an asymmetric effect is evident when total financing is categorized based on underlying contracts. Moreover, in the short run, musharakah financing strengthens financial stability, while during a long-run relationship mudarabah financing plays the most pivotal role in increasing the level of stability in the banking system. The study proposes that the financial authorities should be concerned with the non-linear symmetric and asymmetric relationships with Islamic banks, particularly in the underlying contracts that the banks employ. This is considered to be important to avoid financial instability in the banking system.

Acknowledgment
The authors gratefully acknowledge the support from Direktorat Penelitian dan Pengabdian Masyarakat (DPPM) Universitas Islam Indonesia No.: 023/ Dir/ DPPM/ 70/ Pen.Unggulan/ XII/ 2022 and for providing a research grant for the study.

The worldwide banking industry is currently undergoing a digital transformation. The innovative behavior of bank employees is a significant aspect of commercial banks’ future survival and development. One of the most significant resources for cultivating good employee behavior is leadership. As a response, this study examined how authentic leadership affects employees’ innovative behavior. The mediating role of cognitive crafting and hope between authentic leadership and innovative employee behavior was also investigated. Using a quantitative approach, data were collected from 610 Thai bank employees. The structural equation modeling (SEM) analysis findings revealed an association between authentic leadership and innovative employee behavior. According to the mediation analysis results, hope and cognitive crafting appeared to mediate the relationship between authentic leadership and innovative employee behavior. These findings may help develop leadership research in the field of innovation management. Thus, organizations should identify, cultivate, and support authentic leaders who can inspire innovative behavior among employees through cognitive crafting and hope.

Recently, the demand for internet banking has been gradually increasing the number of online banking customers, where the banking clients or customers do not need to visit a bank branch for their transactions. The principal focus of this inquiry is to ascertain how various aspects of e-service quality relate to online baking customers’ happiness, particularly with regard to Bangladeshi commercial banks. Data information was collected from three commercial banks in Bangladesh using an online survey questionnaire, and this study is quantitative and exploratory in nature. The study considered those bank customers who use frequently online/internet banking services. The sample size was n=200, and the study adopted a non-probability sampling approach. Five-point Likert scale was used to measure an item-wise question where “1” stands for “Highly Disagree” and “5” stands for “Highly Agree”. The consequences of this study demonstrate that e-service quality dimensions play a significant role in creating customer satisfaction for online banking customers. The study proposes four hypotheses, and the hypotheses are accepted in this research. Based on this study, bank management should have utilized e-service quality dimensions such as perceived security risk, perceived ease of use, perceived website quality, and perceived responsiveness to create the relationship between e-service quality dimensions and online banking customer satisfaction. Bank management will receive some guidance on developing policies and strategies to improve the satisfaction level of online customers.

The impact of gender participation on the maturity of crossed-due loans is observed in this study. Furthermore, the associations between maturity of crossed-due loans, their number, and loan issued on physical collateral and collective bail are also monitored using the unbalanced panel data of thirty microfinance companies. The study investigates the short- and long-term link between response and predictor variables. It is founded on an exploratory and descriptive research design. The Hausman test, fixed effect or LSDV model, Pedroni and Kao co-integration test are used to observe the relation and impact. The maturity crossed due loan number, total loan amount, loan issued against physical collateral, and loan allocated on collective bail are jointly significant to determine the maturity of crossed due loan amount of microfinance companies of Nepal. It is found that women are more conscientious in repaying loans on time compared to male borrowers. Per rupee 0.382 rupees, a maturity crossed due loan is found in microfinance companies where only women can borrow, but per rupee 0.404 rupees, a time crossed due loan is found where men and women can borrow. Policymakers of banks are not necessarily hesitant to provide loans to female borrowers.