The impact of electronic banking on the financial performance of Maskan Bank

Academic Thesis for Master's Degree (M.A.)

Field: Business Administration

Abstract

With the increasing development of technology and industrialization of countries, bank managers are trying to increase new banking services, which, being different from other competitors' services, have a special advantage to attract customer deposits. The purpose of this research is to investigate the effects of using electronic banking tools on the financial performance of Maskan Bank. Therefore, by forming a linear regression, the effect of the growth rate of the number of sales terminals, credit cards, monthly performance of ATMs and branch terminals on return on assets and return on equity was explained. After examining the classical assumptions, it was estimated by the time series method and finally it was determined that, although the number of electronic devices has increased during the years 1386 to 1390, the rate of growth has not increased, and among the aforementioned variables, only the growth of the number of credit cards has been effective on the bank's financial performance. In this way, the growth of the number of credit cards has a significant and direct relationship with the return on assets with a coefficient of 0.16, and also a positive and significant relationship with the return on equity with a coefficient of 1.54.

Key words: electronic banking, return on assets, return on equity, housing bank

Introduction

The banking industry is one of the most important and prominent industries in the world, and the ever-increasing expansion of human knowledge in the field of electronic science has caused this industry to benefit from this knowledge. Today, banks in advanced countries act as guides, professional consultants, experts in increasing the financial resources of companies and collecting and exchanging the necessary information for their customers, and they are considered one of the economic drivers of each country. This has caused a tight competitive environment between them. With the increasing development of technology and the industrialization of countries, bank managers are trying to increase new banking services, which are different from the services of other competitors and have a special advantage to attract customer deposits. In advanced countries, more than 70% of the banking affairs of the users of banking services are done without being present at bank branches and by using electronic systems, therefore, by using modern technology of the banking industry and implementing a customer-oriented plan, banks are trying to reduce the need for customers to go to the branch so that customers can do the majority of banking affairs at their place of work or residence in this way (Jackson, 2005:1025). In fact, electronic banking, which is the product of recent developments and the application of information and communication technology in the banking system, allows bank customers and other stakeholders to interact with the bank without intermediaries and through various channels such as the Internet, mobile phones, ATMs, telephones and digital television. The provision of banking services in electronic form, through its effect on reducing banking costs, increases the bank's profit. In fact, with the help of electronic banking, the operational costs of banking services such as transportation costs, necessities and personnel are reduced to the minimum possible, and on the other hand, the fee incomes resulting from the provision of diverse and high-quality services are maximized, which leads to the maximization of banks' profits. The development and use of information technology in various fields, especially in the field of banking, is the result of the capabilities of information technology, which is widely welcomed in the business world today.  Man of the third millennium is trying to distance himself from the traditional model by accelerating the process of development and use of information technology in different parts of the social system and create a new model that fits the requirements of the information age. In this context and like most service providers, the banking system in recent decades has quickly turned to investing in new technologies to provide services to customers, as a way to control costs, attract new customers and fulfill customer expectations, and has placed the use of these technologies (Internet banking, telephone banking, and ATMs) as a strategic necessity in its agenda (Yagoubi and Shakri, 2018). Electronic banking should be examined from different dimensions, the impact of its components, i.e. ATMs, credit cards, sales terminals and other measures of the growth of information and communication technology, on the financial performance, especially the bank's profitability, should be explained.

1-2 Statement of the problem

One of the achievements of information technology tools is electronic banking. Electronic banking includes systems that enable customers of financial institutions to use banking services at three levels of information, communication and transaction (Yagoubi and Alizadeh, 2015, 228). This type of banking, while widely using electronic money, benefits from several channels, including computers, landline and mobile phones, ATMs, kiosks, and sales terminals (Moghdisi, 1389, 60). In fact, competition, durability, new services, and the daily change of customers' needs and demands have prompted banks to formulate strategies in the field of electronic banking so that they can improve their performance (Hamidizadeh et al., 2016, 48). Therefore, knowing and examining electronic banking and getting to know the different dimensions of this banking model in Maskan Bank is undoubtedly very important for providing better services and financial performance of that bank. In this experimental work, while taking a close look at the impact of electronic banking in Maskan Bank, we will address the issue of how the development of Maskan Bank's electronic services will improve its financial performance. Research by economic researchers has shown that banks increase their profitability by increasing their loyal and first-rate customers and creating effective customer satisfaction. Today, most banks face a completely dynamic environment, and all banks, whether large or small, due to the rapid changes in the competitive situations and advanced conditions of the world, customers, as the main determinant of this competition, place great value on technology and speed, and on the next level, the technical expertise of banks (Zaribaf et al., 2010, 55). Today, the use of electronic banking is more of a necessity than an advantage. Because firstly, virtual electronic banks that operate through the Internet are able to provide faster, more complete, more accurate and more favorable services to customers all over the world; Secondly, the slowness caused by the traditional system causes the golden opportunities to attract customers out of the hands of the banks, and with the obsolescence of the paper methods of exchanging commercial documents in developed countries, it practically excludes the possibility of exchanging such documents with advanced countries. Electronic banking uses tools such as electronic money, electronic checks, electronic wallets, various types of cards, including debit cards, credit cards, expense cards, automatic teller machines (ATMs and point-of-sale systems (POS). In addition to the use of hardware and software infrastructures, the use of cultural and legal infrastructures and customer relationship management and human resource management are essential elements of electronic banking (Schneider, 2006).

In the past decade, many efforts have been made in establishing Electronic banking has taken place in Iran, and services such as bank telephones, satellite current accounts, debit cards, ATMs, and point-of-sale systems are among these efforts (Fatemi Ardakani, 1384, 67). But as we know, all the efforts have not been sufficient on a large scale, so it is necessary to examine the benefits and profitability of using information and communication technology as well as data mining in the banking industry.

1-4 Framework Theoretical

The theoretical framework clarifies the relationships between variables, develops the theories that are the basis of these relationships, and also describes the nature and direction of these relationships. (Sekaran, 1386, 94). One of the most important functions of the theoretical framework is to provide variables related to the research problem (Khaki, 2010, 163). It also expresses the relationships governing independent and dependent variables based on thematic literature.