COVID-19, Digital Transformation of Banks, and Operational Capabilities of Commercial Banks

The development of financial technology has promoted the innovation and digital transformation of commercial banks. Through digital transformation, commercial banks can improve bank efficiency and operational capabilities. Through empirical analysis, this study explored the relationship between digital bank transformation and commercial bank operating capabilities and how COVID-19, bank categories, and enterprise life cycles affect the relationship between digital bank transformation and commercial bank operating capabilities. This study selected data from China's commercial banks from 2011 to 2021 and used the regression method of fixed effects to conduct an empirical analysis. The research results show that the digital transformation of banks has improved the operational capabilities of commercial banks. Further analysis showed that the emergence of COVID-19 has negatively affected their relationship. At the same time, compared with rural commercial banks and commercial banks in the recession and phase-out periods, non-rural commercial banks and commercial banks in the growth and maturity stages play a more vital moderating role in the impact of the digital transformation of banks on the financial performance of commercial banks. The main research object of this study is Chinese commercial banks, and this study examines the results of banks' digital transformation and enriches the research on digital transformation. At the same time, this study is helpful to investors who like investment banks and has good practical significance.

Two Major Economic Crises in the Early Twenty-First Century and their Impact on Central Bank Independence

Two major economic crises in the early twenty-first century have had a serious impact on monetary policy and CB independence. Disruption in financial intermediation and associated deflationary pressures caused by the global financial crisis of 2007–2009 and European financial crisis of 2010–2015 pushed central banks (CBs) in major currency areas towards adoption of unconventional monetary policy measures, including large-scale purchase of government bonds (quantitative easing). The same approach has been taken by CBs in response to the COVID-19 crisis in 2020 even if the characteristics of this crisis differ from the previous one. As a result of both crises, CBs have become major holders of government bonds and de facto – main creditors of governments. Against rapidly deteriorating fiscal balances, CBs have become hostages of fiscal policies, which compromises their independence. Risks to the CB independence also come from their additional mandates (beyond price stability) and populist political pressures.

Impact of e-service quality on e-loyalty of online banking customers in Pakistan during the Covid-19 pandemic: mediating role of e-satisfaction

This study explores the mediating role of e-satisfaction during the pandemic on the relationship between e-service quality and e-loyalty of banking customers in Pakistan. The data were collected from 442 customers of online banking services in Pakistan during the Covid-19 pandemic, following a survey-based study. Baron and Kenny (J Personal Soc Psychol, 51(6):1173, 1986) and Preacher and Hayes (Behav Res Methods, 40(3):879-891, 2008) mediation technique which utilizes the bootstrapping method has been used to explore mediation. The findings show that e-service quality has a significant positive effect on the e-loyalty of the customers of online banking services. Relationships between e-service quality and e-loyalty of online banking customers in Pakistan are significantly and fully mediated by their online satisfaction in unusual situations. This study would help the bankers to implement more effective marketing strategies to retain their customers and attract potential customers, particularly during non-normal situations like the Covid-19 pandemic. It will help them identify the areas of e-services that need improvement to enhance the satisfaction and loyalty of the customers. The bootstrap method for mediation along with Baron and Kenny (J Personal Soc Psychol, 51(6):1173, 1986) leads to using a more sophisticated methodological technique to explore the mediation. The Oliver Expectancy-Disconfirmation Paradigm (EDP) in electronic banking setup during non-normal situations like the Covid-19 pandemic also served as a unique contribution to this study. Application of Baron and Kenny (J Personal Soc Psychol, 51(6):1173, 1986) mediation along with Preacher and Hayes (Behav Res Methods, 40(3):879-891, 2008) leads to more robust findings for the study in non-normal situations like the Covid-19 pandemic. The study findings add scientific value as they are applicable to the banking sector in particular in non-normal situations like the Covid-19 pandemic and the overall service sector in general. Further, as two different methods of mediation have been employed and this makes the study more rigorous and scientific.

Setting up of Bad Bank – A New Era Begins

During Covid 19 pandemic, Public Sector Banks (PSBs) experience the high and increasing level of gross non performing assets. This is as high as 14 per cent which is matter of concern to all stakeholders. Consequently, these banks to witness high provisioning, low capital base and dismal credit growth. To arrest the trends in stressed assets, existing recovery channels including Insolvency Bankruptcy Code have not produced the desired results. Hence, the Government has recently taken a bold decision to set up a Bad Bank and provide the sovereign guarantee to security receipts issued by the Bad Bank upon purchase of stressed assets from PSBs. The Bad Bank aims at buying stressed assets, restructure them successfully and, thereafter, to sell the same to investors which would facilitate the PSBs to clean their balance sheet and strengthen the capital base. While there is enough business potential for the Bad Bank in the near future, its success will depend on purchase price of assets transferred, expertise in management of distressed assets, business model and presence of a conducive environment to operate. It is hoped that, during the post pandemic, the Bad Bank would prove to be the best option for revival of stressed assets and enable PSBs to lend optimally for productive purposes. Towards this end, before the Bad Bank starts functioning, there is a dire need to create awareness of the same by understanding its background, organization structure, business model and emerging challenges.

The importance of entrepreneurial leadership in fostering bank performance

PurposeThis study investigates how entrepreneurial leadership fosters market orientation, bank innovativeness and bank performance;it also investigates how market orientation contributes to brand orientation, bank innovativeness and bank performance.Design/methodology/approachIn total, 1500 questionnaires were distributed to 100 bank branches in Indonesia (500 to managers and 1000 to employees);300 responses (20% response rate) were used for further statistical analysis.FindingsThe results confirmed the existence of relationships among entrepreneurial leadership, market orientation, bank innovativeness, brand orientation and bank performance. The role of entrepreneurial leadership in fostering market orientation, bank innovativeness, brand orientation and bank performance demonstrates that leaders can motivate employees to complete their tasks.Practical implicationsThe findings suggest that entrepreneurial leadership, new ideas and innovative products and services can foster bank performance.Originality/valueThe emerging banking industry in Indonesia has witnessed changing market conditions. Banks will benefit from being more market-driven and diverse in their customer relationships to generate value.

Disclosures for slavery accounting concerning SDG 8 and corporate attributes: a study on the banking industry of Bangladesh

With the continuous adoption of sustainable development goals by all countries, there is a rising demand for implementing and disclosing related information by companies. This paper aims to find an idea about the nature of reporting practices related to slavery by listed banking companies of Bangladesh and the relationship between reporting practice and organizational attributes. Existing literature provides the foundation of this study. Annual reports from 2016 to 2021 were collected from the company websites, and content analysis was used to determine the nature and extent of slavery reporting;an index was developed based on content analysis. Independent variables were determined based on the current literature review. Statistical tools, including the test of multicollinearity, heteroscedastic, correlation, and linear regression and panel data analyses were used to determine the fitness of the model and the impact of independent variables on the dependent variable. Content analysis showed a clear picture of the consciousness about slavery accounting as all of the companies reported a minimum of three components of selected targets from SDG8. The evidence says that the quality and quantity of slavery reporting are improving yearly. A satisfactory correlation was found among the variables. Some variables, such as ownership nature, Board Size, etc., have a positive impact, and insignificant impact was found for Age and leverage on slavery disclosure. This paper only examines the banking industry, and it assesses only a few targets of SDG 8. Thus the results obtained from the study may not be similar to other companies. Data collection also has limitations;our target was to study till 2022 but some information requirements of few companies were not available on websites. This research paper is the first attempt to determine the nature of slavery accounting in Bangladesh. It will encourage business organizations to extend their reporting on slavery and SDGs.

Do the macro and global economic factors drive the nonperforming loans in GCC economies?

PurposeThe current study aims to investigate the determinants of nonperforming loans (NPLs) in the GCC economies during the period spanning 2000 to 2018. It also examines whether the worldwide financial crisis of 2007–2008, which brought the issue of non–performing loans to the greater attention of academics and policymakers, had a substantial impact on NPLs in this region.Design/methodology/approachThe sample consists of 53 conventional banks from GCC countries, and the basic data for the study is obtained from various sources such as Bankscope, IMF World Economic Outlook, World Bank and Chicago Board of Options Exchange Market Volatility Index. The estimations were done by dynamic panel data regression modeling using system generalized methods of moments.FindingsThe findings reveal that both, the non-oil real GDP growth rate and inflation have favorable effects on NPLs. On the other hand, domestic credit to the private sector and the volatility index have an adverse effect on NPLs. Furthermore, the period-wise analysis shows that the relevance and significance of the determinants of NPLs vary between the precrisis and postcrisis periods. It is also reflected through the intercept dummy, which is found to be significant, indicating that the financial crisis, as a global economic factor, had a significant impact on NPLs. A number of robustness tests are applied, which indicate that the results are mostly robust and consistent in terms of the significance of the explanatory variables and the direction of their relationship with the dependent variable.Practical implicationsPolicymakers and bank authorities must strive to maintain a healthy economy and implement macroprudential policies to improve the financial stability of banks and reduce credit risk.Originality/valueTo the best of the authors' knowledge, this is likely the first study that empirically investigates the influence of the financial crisis on NPLs in the context of GCC economies. In addition, the research spans 19 years to produce more conclusive results.

Micro Finance in India - Emerging Challenges

For promoting financial inclusion in India, both banks and Non-Banking Finance Companies - Micro Finance Institutions (NBFC-MFIs) play a pivotal role by providing microfinance to individuals and tiny enterprises. There are 187 lending institutions in India engaged in providing microfinance of more than Rs.2.27 lakh crore. Today, microfinance activity is more technology driven to ensure adequate, timely and hassle free financial services. During the Covid-19 pandemic, the sector suffered significantly due to lack of demand for credit and increasing loan defaults. Hence, RBI announced certain measures including debt restructuring to provide relief for stressed micro loan customers and creating more liquidity in the market. Post the pandemic, there are enough business opportunities for the microfinance sector to prosper. However, the age old issues such as lack of due diligence in lending, over-indebtedness and multiple borrowing by customers and unethical recovery practices need to be addressed. Therefore, there is a need to make microfinance activity more digital, promote financial literacy, strengthen risk management systems, upgrade skills of the field level staff and formulate an effective grievance redressal system. Towards this end, the article attempts to review the performance of the microfinance sector at a time when India is currently celebrating the 75th year of Independence and offer suggestions to strengthen the microfinance sector in the country.

АНАЛІЗ ТЕНДЕНЦІЙ РОЗВИТКУ ГРОШОВО-КРЕДИТНОЇ СИСТЕМИ УКРАЇНИ

Bid устшност'1 фуищоиуваиия иацоиально!' грошово-кредитноi системи залетать ефективнсть органiзацľí в Kpami грошового обгу, девостi проведения заходв монетарного регулюваиия з боку центрального банку кроши i мотливкть задовольняти потреби спотивачв у р'вномаштиих иих ф'шансових послугах, а такот дieвiсть заход'ю щодо вдбудови иaшоiекоиомiкu у повоенний пер'юд i мотливкть нормального функцюнування в умовах военного стану. Метою статт'> е аналв теиденцй розвитку гpошово-кpедитиоi системи Украши, визначення етапв ii становления, а такот осиовиих проблем у поточний пер'юд. У робот'1 дотдтено становления та етапи розвитку грошово-кредитно!'системи в Укра'щ а саме визначено так ключов'! етапи: з 1991 р. - започаткування шституцшного становления грошово-кредитно!'системи;з 1996р. - введения иацюиальио!грошовоi одииицр з 1999 р. - подолання свтово!' фiиaисовоi кризи 1998 р. та розбудова нацонально!'грошово-кредитно!' системи;з 2009 р. - подолання наслдкв свтово!' фiиaисовоi кризи 2008 р.;з 2015 р. - подолання наслдкв росшсько-укра'шсько!' вiйии 2014 р.;з 2020 р. - подолання наслдкв свтово!' фiиaисовоi кризи 2019 р., прискореноi пандемею коpоиaвipусу;з 2022 р. - стабмвацю та подолання иаслдкв активно!' фази агресн роси проти Украши. Проаналвовано деяк ключовi показники, що характеризують грошово-кредитну систему кра'ши, а саме: дииaмiку грошово!' бази кра'ши, змии обл'шово!'ставки, щорчний прирст шдексу спотивчих цш, дииaмiку к'шькоmi дючих банюв та !'х активв, дииaмiку та структуру кредитв, що иaдaиi баиквськими установами, змiии pеитaбельиостi активв та катталу банквських установ. Проаналзовано основнi ризики та причини !'х виникнения у гpошово-кpедuтиiй системi Украши пд час вiйии. Визначено основнi поточи проблеми грошово-кредитно!' системи Украши у военний перод, а такот запропоновано деяк напрями !'х подолання. Запропоновано для оздоровления баиквського сектора вивести з ринку иедiездaтиi банки;для забезпечення шфляцшио!' стaбiльиостi иеобхдио забезпечити повернення до реалзацк полiтики iифляцiйиого таргетуваиия;для вдбудови економки, зокрема реального сектора, необхдно пом'якшити вимоги регулюваиия кредитио!'дяльиостi, впровадтувати нструменти цльового стимулювання кредитно! aктивиостi банквських установ.Alternate :The successful functioning of the national monetary system determines the efficiency of the country's money circulation, the effectiveness of monetary regulation measures taken by the country's central bank, and the ability to meet the needs of consumers for various financial services, as well as the effectiveness of measures to rebuild our economy in the post-war period and the ability to function normally under martial law. The purpose of the article is to analyze the trends in the development of the monetary system of Ukraine, to identify the stages of its formation along with the main problems in the current period. The publication examines the formation and stages of development of the monetary system in Ukraine, namely, identifying the following key stages: since 1991 - the beginning of the institutional formation of the monetary system;since 1996 - introduction of the national currency;since 1999 - overcoming the global financial crisis of 1998 and further development of the national monetary system;since 2009 - overcoming the consequences of the global financial crisis of 2008;since 2015 - overcoming the consequences of the russian-Ukrainian war of 2014;since 2020 - overcoming the consequences of the global financial crisis of 2019, accelerated by the coronavirus pandemic;since 2022 - stabilization and overcoming the consequences of the active phase of russia's aggression against Ukraine. Some key indicators characterizing the country's monetary system are analyzed, namely: the dynamics of the country's monetary base, changes in the discount rate, annual growth in the consumer price index, dynamics of the number of operating banks and their assets, dynamics and structure of loans granted by banking institutions, changes in the return on assets and capital of banking institutions. The main risks and causes of their occurrence in the monetary system of Ukraine during the wartime are analyzed. The main current problems of the monetary system of Ukraine in the wartime period are identified, and some directions for overcoming them are proposed. It is proposed that in order to sanitize the banking sector, it is necessary to withdraw insolvent banks from the market;to ensure inflationary stability, it is necessary to ensure a return to the implementation of inflation targeting policy;to restore the economy, in particular the real sector, it is necessary to ease the requirements for regulating loaning activity, to introduce instruments for targeted stimulation of loaning activity of banking institutions.

ANALYZING A MACROPRUDENTIAL INSTRUMENT DURING THE COVID-19 PANDEMIC USING BORDER COLLISION BIFURCATION

Bank Indonesia, el banco central de Indonesia, ha realizado ajustes en un instrumento de política macroprudencial llamado índice de intermediación macroprudencial (IIM) para impulsar el crecimiento de los préstamos en el contexto de la recuperación económica nacional debido a la pandemia de COVID-19. En este artículo, se desarrolla un modelo dinámico de préstamo bancario con comportamiento procíclico, y se equipa con el instrumento predecesor del IIM denominado requerimiento de reserva basado en la relación préstamo-depósito (RR-RPD). Examinamos los efectos de los parámetros RR-RPD en la dinámica del préstamo utilizando el análisis de bifurcación de colisión de fronteras para determinar los valores umbral de los parámetros RR-RPD para que se pueda mantener la estabilidad del equilibrio del préstamo. Este modelo se aplica a los datos mensuales de los bancos comerciales de Indonesia antes y durante la pandemia de COVID-19 para evaluar la región de estabilidad de los parámetros del instrumento.Alternate :Bank Indonesia, the central bank of Indonesia, has made adjustment settings in a macroprudential policy instrument called macroprudential intermediation ratio (MIR) to boost loan growth in the context of national economic recovery due to the COVID-19 pandemic. In this paper, a dynamic model of bank loan with procyclicality behavior is developed, and it is equipped with the predecessor of the MIR instrument called loan-to-deposit ratio based reserve requirement (LDR-RR). We examine the effects of LDR-RR parameters on the dynamics of loan using the border collision bifurcation analysis to determine the threshold values of the LDR-RR parameters so that the stability of loan equilibrium can be maintained. This model is applied to monthly data of Indonesian commercial banks before and during the COVID-19 pandemic to assess the stability region of the instrument parameters.

THE MICROPRUDENTIAL STRESS TESTING FOR BANKING SYSTEM. A STUDY CASE ON ALGERIAN PRIVATE BANK, USING ACCOUNTING APPROACH

The aim of this article is to highlight the importance and effectiveness of stress testing as part of microprudential policy. We focus on microprudential stress testing to assess financial stability, the resilience and solvency of one important private bank in Algeria in the face of liquidity risk. Our empirical analysis adopts a bottom-up approach based on an accounting method. It studies the relationship between the bank solvency ratio (ratio cook) and bank portfolios, such as loans to the construction, trade, industry, and automotive sectors. Microeconomic stress tests assess the credit risk of a bank's loan portfolio by bottom-up accounting approach, applying eleven pessimistic and plausible multi-variable scenarios with potential risks. The tests introduce several types of microeconomic shocks into the scenarios, which are designed to replicate those that occurred during the global financial crisis. The tests results show that this private bank is highly resistant to liquidity risk, despite significant losses on its investment portfolio. The stress tests prove once again, and especially after the 2008 financial crisis, that they are indispensable tools in the management of banking risks and against systemic risks.

Impact of Financial Technology on Improvement of Banks' Financial Performance

This study investigates the main financial technologies adopted by banks to improve their financial performance. The study population consists of commercial banks listed on the Amman Stock Exchange and Abu Dhabi Securities Exchange, and includes financial information and data from 2012 to 2020. A total of 115 questionnaires, consisting of five questionnaires for each bank, were distributed to the study population in Jordan and the United Arab Emirates. The dependent variable is financial performance, while the independent variable is financial technology (FinTech). Multiple linear regression analysis was conducted to test the hypotheses. The results showed that FinTech has a positive effect on both total deposit and net profits. This study recommends that banks be encouraged to adopt inclusive strategies to attain sustainable development.

The Impact of ICT on the Profitability of Indian Banks: The Moderating Role of NPA

The role of Information and Communications Technology (ICT) cannot be ignored in today's era of working. Its effects are studied in several sectors by various researchers. This study covers the impact of ICT on the profitability of banks. Thirty-three banks are operating in India. A sample period of 10 years (2010 to 2019) was studied. The study also provides insight into how ICT helps the banks' profitability during and post-COVID-19. A panel data analysis is performed to estimate the results. This study found that ICT adversely impacts banks' profitability (NIM) in India in a linear association. However, the quadratic association indicates a positive U-curved relationship between ICT and profitability. In addition, the Net of Non-Performing Assets significantly but negatively impacts the connectivity of ICT and profitability. The findings imply that banks should invest in ICT to maximize the long run. The findings have no significant implication on all stakeholders, including policymakers, shareholders, and managers, to consider implementing ICT tools as an essential factor in enhancing a bank's profitability in the long run. In addition, the level of otherwise lowered investments in ICT cannot be a fruitful step. The current study augments the existing literature on banking by providing novel evidence on the association of ICT with profitability under the influence of NPA. This study argues for the application of ICT in banks in order to increase their profitability. ICT helps the bank maintain transparency, accountability, and even the reach of financial services increases. This situation again leads to the enhancement of the country's economy.

Determinants of Bank Management Confidence Level in Indonesia moderated by Bank Scale

This study examines the determinants of management confidence level of listed bank on the Indonesian Stock Exchange. The confidence level referred to confidence in deciding the deposit interest rate given to customers. The lower the interest rate compared to the other, the bank's management is more confident. This means that with lower deposit interest, management remains confident that customers remain loyal. This research used Model Panel Data to estimate determinants Banks Management Confidence Level in Indonesia moderated by Bank Scale. Banking ratio and macroeconomic data for period 2017 and 2021 become variable research in this paper. This research found that CAR and NPL has positive and significant effect on IETDR at level of Significant of 5%. Inflation and COVID have negative and significant effect on IETDR. Bank Scale or Bank Book as moderating variable could strength to IETDR for CAR and NPL.

The Confidence of and Concern about Using Mobile Banking among Generation Z: A Case of the Post COVID-19 Situation in Thailand

This research paper focuses on mobile banking acceptance among Generation Z users by combining the technology acceptance model (TAM) and the unified theory of acceptance and use of technology (UTAUT) theory, as well as extending the theories with perceived trust and risk. During the COVID-19 pandemic, the online questionnaire survey was distributed using Google Forms, and the sample group was Thai Generation Z who were aged between 18 and 25 years old. The research objectives aim to (i) investigate the crucial effects that potentially affect user intention and actual usage of mobile banking, (ii) identify the most influential factor impacting users' intention and behavior, (iii) further study the trust and risk perception of Generation Z users on mobile-banking intention and actual usage, (iv) discuss the findings with the antecedent studies, and (v) contribute the research findings both theoretically and practically. The proposed constructs include perceived usefulness, perceived ease of use, social influence, facilitating conditions, perceived trust, perceived risk, behavioral intention, and actual usage. There are fourteen proposed hypotheses to be tested. Based on the outcomes and the standardized coefficient beta, perceived usefulness (β = 0.518) was the strongest factor determining Generation Z's behavioral intention, while perceived ease of use (β = 0.809) impacting perceived usefulness demonstrated the strongest relationship among all of the hypotheses.

Pandemic-Induced Behavioral Change in Mobile Banking Adoption: An Opportunity for Indian Banking Industry for Embracing Artificial Intelligence

The present study aims at understanding and analyzing the COVID-19-induced behavioral change spurting artificial intelligence (AI) adoption in Indian banking industry. The study has further identified and analyzed the usage pattern of Indian customers for mobile banking/online banking services in the pre-pandemic phase and progression of Indian customers for mobile banking/online banking services during the pandemic. Secondary data has been used for deep understanding of the AI adoption in Indian banking industry, with reports from McKinsey, PWC, RBI, NPCI, BIS, etc., to form the base. The period of study was taken from 2016 to 20, and this was taken keeping in mind the timing of another unprecedented event of demonetization. Behavioral change of Indian banking industry customer was assessed on three broad parameters change in value and volume of mobile banking transactions on year on year basis. COVID-19-induced behavioral change translating in massive jump of 178% in volume of mobile transactions between March 2019 and 2021. The increase in number of smart phone users and access to connectivity and desired technology has helped the cause. With 2020–21 punctuated by several nationwide as well as localized lockdowns adoption of AI for customer engagement has been crucial for Indian banking industry, which has further translated in to designing and customizing products and risk profiling of customers further resulting in increased operational efficiency and intuitive decision making. The behavioral change induced by COVID-19 in the Indian baking industry achieves competitive advantage by truly responding to huge customer data base which has been utilized by other financial industries as now it can have systems which understand and are responsive to behavior of varied customers. From responses feeded chatbots to intuitively responsive AI bots, the customer engagement is going to be a whole new experience which will help in customer acquisition and retention. Further, with falling data storage costs, increasing processing speeds and capabilities and improved connectivity and access for all has helped the rapid automation and AI adoption. Enterprise level adoption of AI has led to revenue generation and optimization of functional resources this reducing the cost at functional level. The AI adoption has been continuous from the banks over the years though banks have started to harness its potential in the recent years with customers adoption of smart hand-held devices. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023.

The Impact of COVID-19 Pandemic on Islamic and Conventional Banks' Profitability

The banking sector has a significant impact on a nation's financial stability and economic development. As one of the fundamental components of the financial sector, banks offer services that are essential for the expansion of the markets. The stability of the financial system is significantly impacted by the efficiency of the banking sector. COVID-19 has had a tremendous effect on the economy. This pandemic cannot be disregarded, considering how widespread it has been and how many people it has affected globally. Both society and the global economy have undergone profound change. Hence, it is critical to ascertain how severely the outbreak has impacted the banking system. To assess the potential impact of pandemic, the current study examined conventional and Islamic banking. This study also investigates how COVID-19's moderating effect influences the banking system. Financial statements from 10 conventional banks and 5 Islamic banks in Pakistan are the sources of this study's sample data. COVID-19 is a moderator in this study. The empirical estimations by means of the fixed-effects approach suggests that the moderator has a large impact on bank profitability. In addition, COVID-19 appears to have a stronger influence on the Islamic banking system.

The intention of small and medium enterprises' owners to participate in waqf: the case of Malaysia and Indonesia

PurposeThe purpose of this study is to assess small and medium-sized enterprises (SMEs) owners' intentions to participate in waqf, involving two countries, which are Malaysia and Indonesia, using the theory of planned behavior. SMEs are the backbone of many economies, representing 95% of all companies worldwide and accounting for 60% of employment. Based on this fact, this paper analyzes the influence of religiosity, knowledge and attitude to predict the intentions of SMEs' owners in waqf participation in Malaysia and Indonesia.Design/methodology/approachData were randomly obtained from 175 SMEs owners from Malaysia and Indonesia with the Statistical Package for the Social Sciences (SPSS) used for analysis.FindingsThe empirical analysis data suggest that knowledge and attitude show a significant impact on the intentions of SMEs' owners to participate in waqf, while religiosity does not have a significant impact on the intentions of Malaysian and Indonesian SMEs' owners to participate in waqf.Practical implicationsThis study aims to assist SMEs in Malaysia and Indonesia to formulate appropriate strategies and marketing using waqf for the sustainability of SMEs which represent more than 90% of business establishments in both countries. The strategy is a necessity, especially because the government is targeting to promote a sustainable Islamic financial system, improve governance policy and halal industry for SMEs, strengthen the development of Malay Reserve land, providing as financial independence to higher learning institutions and invest in digitalization and advanced technology through waqf funds. Therefore, both countries should take the initiative to provide training to equip SMEs with extensive knowledge through multiple platforms to further encourage their participation in waqf.Originality/valueBecause of the increasing interest in waqf participation both in Malaysia and Indonesia, this study claims three essential contributions. First, it aims to examine the intention of SMEs in waqf participation among the business owners in Malaysia and Indonesia. Second, the study findings are expected to benefit the development of literature in accordance with Islamic social finance, particularly waqf. Third, this study provides an insight into the inclusive knowledge and attitude of SME owners and their intention to participate in waqf.

Mobile Banking Service Design Attributes for the Sustainability of Internet-Only Banks: A Case Study of KakaoBank

The rapid development of information technology and the diffusion of Internet-only banks have made mobile banking an essential service in Korea. Meanwhile, the spread of non-face-to-face services triggered by the COVID-19 pandemic is encouraging continuous innovation in the banking sector. This study explored the application design attributes of mobile banking in the context of the sustainability of Internet-only banks. Specifically, this study empirically analyzed user usage intention and attitude using the theory of planned behavior (TPB) and seven service design attributes derived from previous studies, namely: information quality, service quality, utilitarian value, hedonic value, ease of use, usefulness, and aesthetics. Information quality, utilitarian value, ease of use, and usefulness positively affected sustainable usage intention and attitude, while service quality, hedonic value, and aesthetics did not affect sustainable usage intention and attitude. Notably, this study derived the theoretical attributes of financial service design from the user's perspective, which has not yet received much attention in existing research, by applying the TPB. It also identified mobile banking service attributes that may support the sustainability of financial services, which lays a foundation for further research. Moreover, this study's findings offer insights into which user touchpoints designers should focus on when developing services.

Factors Affecting the Financial Performance of Islamic Banks in Pakistan

This research aims to evaluate the internal factors influencing the performance of Islamic banks in Pakistan. There are currently five Islamic banks in operation, and data from all five have been used to analyze their performance from 2008 to 2021. The data was collected from the State Bank of Pakistan. To examine financial performance, this study used return on assets (ROA) and returns on equity (ROE) as proxies, and considered both internal attributes (such as liquidity, bank size, asset quality, capital adequacy ratio, operational efficiency, and assets management) and external factors (such as macroeconomic indicators like GDP growth and inflation rate). Ordinary least squares (OLS) estimation is employed to examine the relationship among variables. The estimation findings suggest that all of the internal factors have a strong association with banks' performance. Bank size and asset quality were found to have a positive and significant association with ROA, while asset quality and assets management were associated positively with ROE. Additionally, during the Covid-19 pandemic period, banks' size and liquidity were found to adversely affect ROA of Islamic banks, while operational efficiency had a positive impact.