Performance of Islamic E-Banking: Case of Iran

Document Type : Original Article

Authors

1 Department of Accounting, Mobarakeh Branch, Islamic Azad University, Mobarakeh, Isfahan, Iran

2 Department of Accounting, Shahinshahr Branch, Islamic Azad University, Shahinshahr, Iran

Abstract

Banks, as financial and service institutions, play a decisive role in the circulation of money and wealth of society, and therefore have a special place in the economy of any country. Therefore, banks' favorable and effective activity can have important effects on the growth of various economic sectors and increase the quantity and quality of production. Today, Islamic banking requires new methods, effective customer orientation, presentation of new technologies, servicing and services expected by the customer, and any bank that is more successful in those matters, succeeds in attracting resources in a competitive market. As a result, more durability and survival will increase with productivity. E-banking is one of the most important options for banks to achieve these goals. The present study examines the effect of E-banking on bank fees and returns on assets as indices of Islamic banking performance. In order to test the research hypotheses, multiple regression methods and statistics and information of 8 banks in the period 2005-2015 have been used. According to the results, E-banking has a positive and significant effect on both factors of Islamic banking performance, i.e., bank fees and return on assets index.

Keywords

References

  1. Abbaszadeh, M. Kohi, H. and Dastjerdi, H. (2014). Investigating the Performance of Electronic Banking in Iranian Banks Using Data Envelopment Analysis and Principal Component Analysis Model. Quarterly Journal of Trend, 21(67), 75-99. https://www.sid.ir/en/journal/ViewPaper.aspx?id=437802
  2. Akhisar, I. Tunay, K. and Tunay, N. (2015). The Effect of Innovations on Bank Performance: The Case of Electronic Banking Services. Procedia-Social and Behavioral Sciences, 195, 369-375. https://doi.org/10.1016/j.sbspro.2015.06.336
  3. Asadzadeh, A. and Kiani, H. (2012). The effect of using ATMs, sales terminals and branches on the profitability of selected Iranian banks. Quarterly Journal of Modern Economics and Trade, fall (29-30), 181-206.
  4. Claessens, J. Dem, V. Cock, D. Preneel, B. and Vandewalle, J. (2002). On The Security of Today’s Online Electronic Banking Systems. Computers & Security, 21(3), 257-269. https://doi.org/10.1016/S0167-4048(02)00312-7
  5. Dinh, V. Le, U. and Le, P. (2015). Measuring the Impacts of Internet Banking to Bank Performance: Evidence from Vietnam. Journal of Internet Banking and Commerce, 20(2), 1-7. http://www.icommercecentral.com
  6. Ehsanafar, M.H. ghomiha, V. and Hasani, M. (2014). Investigating the Development Impact of Electronic Banking on the Profitability of Selected Iranian Banks. Business Reviews, 69, 33-44.
  7. Hajizadeh Rad, B. and Esmailpour, H. (2016). Investigating the Relationship between Electronic Banking and Financial Performance of Sina Bank, 7th International Conference on Economics and Management, Sweden-Dalarna, ICOAC University Communication Center, Dalarna State University.
  8. Hosseini, Sh. and Faramarzi Ebad, H. (2016). Investigating the Impact of Electronic Banking on Return on Equity in Selected Banks Operating on the Tehran Stock Exchange. Quarterly Journal of Financial Economics, 10(35), 147-169. https://www.sid.ir/en/Journal/ViewPaper.aspx?ID=522924
  9. Jenkins, H. (2007). Adopting internet banking services in a small island state: assurance of bank service quality. Managing Service Quality: An International Journal, 17(5), 523-537. https://doi.org/10.1108/09604520710817343
  10. Liao, Z. and Cheung, M.T. (2001). Internet-based e-shopping and consumer attitudes: An empirical study. Information & Management, 38(5), 299-306. https://doi.org/: 10.1016/S0378-7206(00)00072-0
  11. Manminder, S.S. and Tripti, W. (2015). Impact of E- Banking on profitability of commercial banks in India. International Journal in Management and Social Science, 30(20), 478-483. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1080.3009&rep=rep1&type=pdf
  12. Mateka, M. Gogo, J. and Omagwa, J. (2016). Effects of Internet Banking on Financial Performance of Listed Commercial Banks in Kenya. American Journal of Finance, 1(2), 53-71. https://repository.maseno.ac.ke/handle/123456789/3114
  13. Meihami, B. Varmaghani, Z. and Meihami, H. (2013). The Effect of Using Electronic Banking on Profitability of Bank. Interdisciplinary Journal Of Contemporary Research In Business, 4(12), 1299- 1318. https://journal-archieves31.webs.com/1299-1318.pdf
  14. Mishkin, F. (2006). Economics of Money, Banking and the Financial Market, Banking and Financial Markets, (11th Edition) (The Pearson Series in Economics).
  15. Moussu, C and Petit-Romec, A. (2013). ROE in Banks: Myth and Reality. Financial Times, 1-32.
  16. Available at SSRN: http://dx.doi.org/10.2139/ssrn.2374068
  17. Nexhmi, R. (2004). The Impact of The Relational Plan on Adoption of Electronic Banking. Journal of Services Marketing, 17(1), 54-63. https://www.sid.ir/en/journal/ViewPaper.aspx?ID=282863
  18. Ngango, A. Mbabazize, M. and Shukla, J. (2015). E- Banking and performance of commercial banks in Rwanda (case study: bank of Kigali). European Journal of Accounting Auditing and Finance Research, 3(4), 25-57. https://www.eajournals.org/wp-content/uploads/E-Banking-and-Performance-of-Commercial-Banks-in-Rwanda.pdf
  19. Olson, D. and Zoubi, T. (2011). Efficiency and bank profitability in MENA countries. Emerging Markets Review, 94-110. https://doi.org/10.1016/j.ememar.2011.02.003
  20. Petria, N. Capraru, B. and Ihnatov, I. (2015). Determinants of Banks’ Profitability: Evidence from EU 27 Banking Systems. Procedia Economics and Finance, 20, 518-524. https://doi.org/10.1016/S2212-5671(15)00104-5
  21. Pilehvari, N. (2015). Evaluate e-banking performance by integrating BSC and fuzzy network analysis. Quarterly Journal of Financial Knowledge of Securities Analysis, 8(28), 105-117. https://www.sid.ir/en/journal/ViewPaper.aspx?id=483870
  22. Salehmanesh, A. Shahmohamadi, F. and Kiani, A. (2014). The Impact of Electronic Banking Development on the Profitability of Iranian Banks. International Journal of Natural and Social Sciences, (3), 2606-25922.
  23. Sanli, B. and Hobikoglu, E. (2015). Development of Internet Banking as the Innovative Distribution Channel and Turkey Example. Procedia-Social and Behavioral Sciences, 343-352. https://doi.org/10.1016/j.sbspro.2015.06.362
  24. Shah Mohammadi, F. Salah Manesh, A. and sayed Aziz, A. (2012). Investigating the Impact of the Development of Electronic Banking on the Profitability of Iranian Banks. Banking and Economics, 120, 21-28.
  25. Shahikitash, M.N. Mahmood Pour, k. and Naeeni, M. (2015). Investigating the market structure and profitability coefficient in the Iranian banking system.  Quarterly Journal of Trend, 22(72), 13-37.
  26. Siam, A. (2006). Role of the Electronic Banking Services on the Profits of Jordanian Banks. American Journal of Applied Sciences, 3(9), 1999- 2004. https://doi.org/10.3844/ajassp.2006.1999.2004
  27. Singh Saluja, M. and Wadhe, T. (2015). Impact of E-Banking on profitability of Commercial banks in India. International Journal in Management and Social Science, 3(2), 478-483. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1080.3009&rep=rep1&type=pdf
  28. Sumra, S.H. Manzoor, M.K. Sumra, H.H. and Abbas, M. (2011). The impact of e-banking on the profitability of banks: A study of Pakistani banks. Journal of Public Administiration & Governance, 1(1), 31-38. https://doi.org/10.5296/jpag.v1i1.692
  29. Tunay, K. Tunay, N. and Akhisar, I. (2015). Interaction between Internet Banking and Bank Performance: The Case of Europe. Procedia - Social and Behavioral Sciences, 195, 363-368. https://doi.org/10.1016/j.sbspro.2015.06.335

 

Send comment about this article
CAPTCHA Image

Files

Share

How to cite

Statistics