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Banks give great attention to identifying the risks of adopting FinTech and the extent of its negative impact on their business. This study aims to explore the relationship between the risks of adopting FinTech in banks and their impact on performance, where the balanced scorecard was used to measure performance. This study identifies four risks, which are the most important risks affecting FinTech in banks: systemic risks, operational risks, outsourcing risks, and cyber risks. The data was collected through a questionnaire for 263 respondents at the managerial level of bank branches in Yemen from October to December 2021. Structural equation modeling PLS-SEM and a disjoint two-stage approach were used to approve the model's constructs. The current study proved the validity of the proposed relationship between the risks and the effect of risk variables on each other, except for the impact of outsourcing risks on cyber risks. Also, the study result is that cyber risks and operational risks of adopting FinTech have a negative impact on banks' performance. But the outsourcing risks of the adoption of FinTech have a positive impact on banks' performance the systemic risks do not affect banks' performance. Therefore, this study is considered one of the rare studies that contribute to analyzing the risks of adopting FinTech in banks and its impact on performance. In addition, it gives a clear picture for decision-makers in banks to identify the dark side of FinTech adoption.

The Islamic banking sector has become a crucial part of the global banking industry. Despite the Islamic banking industry's encouraging growth in the Southeast Asia (SEA) region, prior studies mostly focused on Islamic banks' efficiency in the individual country. To fill the literature gap, this study aims to measure the efficiency and productivity growth of Islamic banks in the SEA region. This study adopted the DEA technique and the Malmquist productivity index to evaluate 31 Islamic banks' performance in SEA from 2014 to 2019. The results evidenced an improvement in efficiency and progress in productivity for the banks in the region. The findings documented better efficiency and gradual progress in productivity for Islamic banks in Indonesia, consistent efficiency for Malaysia, a significant improvement for Brunei; hence, both Thailand and the Philippines Islamic bank depicted a drop-in efficiency for 2019. The findings trigger bank managers to acknowledge the inefficiencies and their sources. Investors and policymakers may find the findings useful in observing the banks' performance; thus, taking effective mechanism and policies to promote competent and sustainable SEA Islamic banks in the long run.

This paper examines the impact of multi-layer corporate governance (MCG) on banks' performance under the global financial crisis (GFC) and COVID-19. Using a random and fixed effects method, we regressed the impact of MCG variables on return on assets (ROA), return on equity (ROE), and non-performing loans (NPL) of a panel data of 44 conventional banks (CBs) and 40 Islamic banks (IBs), across 17 countries, and over the period from 2006 to 2020. The results show that board of directors (BoD)' structure has no association with CBs performance whereas the chief executive officer (CEO) duality is strongly negatively impacting CBs performance, especially during the GFC. In addition, supervision framework proxies have a strong positive influence on CBs performance, especially in the period after the GFC. Furthermore, cross-membership and the size of the Shariah board (SB) have a significant negative influence on IBs' performance, but SB qualification has a positive non-significant impact overall-with the exception of NPLs, which had a positive significant impact during the GFC. The supervision position has a favorable impact on IBs performance except during crises.

Although there is a large volume of literature on the relationship between Environmental, Social and Governance (ESG) and firm performance, only a limited number of studies have focused on the banking sector. In addition, most of them used linear models. Therefore, in this study, we examined the impact of ESG and ESG pillar scores (environmental, social, and governance) on the market value of U.S. commercial banks by using linear and non-linear panel regression models over the period of 2016–2020. Moreover, we used the market value as a bank value indicator and included the effect of COVID-19. Results show an inverted U-shaped relationship between market value and ESG and The Social Pillar Score (SPS) and a U-shaped relationship between market value and The Environment Pillar Score (EPS). Findings from this study are important indicators for investment managers and policymakers who want to maximise bank market value while complying with ESG standards.

PurposeThis study aims to empirically evaluate the performance of commercial banks operating in India.Design/methodology/approachThe efficiency of the commercial banks is evaluated using the data envelopment analysis (DEA) approach. We measure the technical, pure technical and scale efficiency of the sampled conventional banks using the input-oriented model. We employed an extended DEA window analysis approach based on a panel sample of 47 banks in the Indian scenario. The period of study is from 2009 to 2018.FindingsThe results obtained from CRS and VRS measures envisage that Indian banks have failed to manage their inputs efficiently and convert them into outputs. It implies that Indian banks do not operate at an optimum level. Moreover, the results show that public banks exhibit superior efficiency scores followed by private and foreign banks. Apart from the aggregate sector level, we also investigate the performance of Indian banks at the individual level for in-depth analysis. The individual bank-level analysis reports that the public sector banks (PSBs) are the most efficient followed by foreign banks, whereas, the least efficient are the private banks.Research limitations/implicationsThe findings of our study have implications for government, financial institutions and policymakers to access the verve and flexibility of the Indian banking system. The government should consider restructuring inefficient banks to enhance overall performance. This can be considered by improvement in managerial efficiency, efficient allocation of scarce resources and appropriate scale of operation. However, the findings of the study should be interpreted in light of the period of study for the banks being operational (as we filter out banks that ceased to exist) in India and empirical methods employed. The results may vary if alternative measures are used.Originality/valueThe present paper investigates the efficiency of the Indian banking sector employing the Data Envelopment Window Analysis (DEWA) technique. To the best of our knowledge, the present study is perhaps the first one to employ the DEWA measure on the Indian banking industry to gauge their performance over time.

This paper evaluates the stock performance of Islamic banks relative to their conventional counterparts during the initial phase of the COVID-19 crisis (from December 31, 2019, to March 31, 2020). Using 426 banks from 48 countries, we find that stock returns of Islamic banks were about 10–13% higher than those of conventional banks after controlling for a host of the bank- and country-level variables. This study explains the Islamic banks’ superior crisis stock performance by exploring the potential role of pre-crisis bank efficiency. In a univariate analysis, we document higher non-parametric Data Envelopment Analysis (DEA) efficiency levels for Islamic banks than conventional banks in the year preceding the COVID-19 crisis. Our multivariate regressions show that the risk-adjusted DEA efficiency scores can explain crisis stock returns for Islamic banks but not conventional banks. The evidence is robust to alternative measures of stock returns, efficiency models, and other empirical strategies. Finally, we present insight on the importance of key bank characteristics in determining the stock returns of conventional banks during the crisis period.

Purpose Earlier firms were evaluated mostly from their financial performance perspective, but with the increasing attention to sustainability goals, environmental, social and governance (ESG) performance of firms became key concerns to stakeholders. The purpose of this paper is to explore the effects of ESG performance of banks on their financial performance, in the context of emerging markets. Design/methodology/approach This study employs the generalised method of moments technique for estimation purpose due to the dynamic nature of the data and to correct for endogeneity. This study uses the ESG performance data of 93 emerging market banks from 2015 to 2018, available in Asset4 ESG database of Refinitiv, formerly known as Thompson Reuters. The accounting and financial data are collected from Refinitiv Datastream database. Findings The findings indicate a positive association of emerging market banks’ environmental and social performance with their financial performance, but governance performance does not influence financial performance. Originality/value While many studies exist on the association of ESG concerns of an organisation with their financial profitability, the literature on in the context of banking is still limited. To the best of the authors’ knowledge, this is the first study that examines the effect of ESG practices of banks on their financial performance in the context of emerging economies.

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.

Purpose The purpose of this study is to examine the impact of chief executive officer (CEO) personal characteristics on the performance of Indian commercial banks. Additionally, it also analyses the nonlinear relationship of CEO age and CEO tenure on the bank performance. Design/methodology/approach A balanced panel data approach has been used in this study. Particularly, the fixed effect estimation technique is used to examine the relationship between CEO characteristics and bank performance during the period 2009–2010 to 2016–2017. Findings The authors find that professional qualification of CEOs in finance stream enhances performance. Additionally, the impact of CEO duality is found to be positive and significant on performance. Male CEOs are beneficial for bank performance. Well experienced CEOs contribute to higher performance. The results are robust across the various proxies of bank performance, and sub-samples based on ownership, size of the bank and board size. Practical implications This study provides insights to policy regulators and policymakers who are entrusted with the appointment of the CEOs in the banks in the light of the ongoing regulatory reforms. Originality/value This study can be considered as one of the early studies, which examines the association between CEO characteristics and bank performance from an emerging economy perspective. It also extends the existing study by considering both public and private banks operating in India.

PurposeThis study examines the impact of financial technology (FinTech) on bank performance employing data from the United Kingdom (UK) banking sector for a period spanning from 2010 to 2019.Design/methodology/approachThis study employs static as well as dynamic panel data regression analysis to assess the impact of FinTech on the profitability of UK banks.FindingsThe results show that FinTech firms positively impact bank performance. For every new FinTech firm introduced into the UK market, net interest margin (NIM) and yield on earning assets (YEA) increase by 6.385 and 3.192% of their sample means, respectively.Practical implicationsCooperating with FinTech firms, UK banks can broaden their portfolio of financial services offered to their customers and optimize their profit margins.Originality/valueThis is the first study that examines the impact of FinTech on bank profitability employing data from a developed market.