Search results for: banking secrecy

Authors: Sohail Zafar, Sardar Javaid Iqbal Khan

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We use a parametric approach within a translog cost function framework to estimate the economies of scale in National Bank of Pakistan from 1997 to 2013. The results indicate significant economies of scale throughout the sample at aggregates and disaggregates taking in account size subject to stipulation ownership. The factor markets often produce scale inefficiencies in the banking of developing countries like Pakistan such inefficiencies are common due to distortion in factor markets leading to the use of inappropriate factor proportions. The findings suggest that National Bank of Pakistan diversify their asset portfolios that it has cost advantage, therefore, expansion in size should be encouraged under current technology because it appears to be cost effective. In addition, our findings support the implementation of universal banking model in Pakistan.

Keywords: scale economies, cost function, disaggregates, aggregates

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Authors: Puji Sucia Sukmaningrum, Achsania Hendratmi, Noven Suprayogi, Muhammad Madyan

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Theoretically, Islamic banks in Indonesia and Malaysia not necessarily aware to the interest rate fluctuation, since they don’t use interest-based instruments. Both countries use dual banking system in which Islamic and conventional banking system are exist. This situation makes the profit-sharing level of the Islamic banks will be indirectly affected by the interest rate fluctuation from the conventional banks system. One of the risk management tools for anticipating the risk of interest rate fluctuation is gap management, which has purpose to narrow the difference between Rate Sensitive Asset (RSA) and Rate Sensitive Liability (RSL). This formed gap will give the information about the risk potential in Islamic banks which respect to the fluctuation on the interest rate. This study aims to determine the position of the gap formed at Islamic Maybank Indonesia and Islamic Maybank Malaysia, and analyze the difference in the formation of gap based on the period of sensitivity. This study is a quantitative research with comparative study using sensitivity gap analysis, independent sample t-test, and Mann-Whitney method. The data being used was secondary data from Maturity Profile contained in the Annual Financial Report of Islamic Maybank Indonesia and Islamic Maybank Malaysia from 2011 to 2015 period. The result shows that, cumulatively the formation of the gap was negative gap. From the results of independent sample t-test and Mann-Whitney, the formation of the gap in Islamic Maybank Indonesia and Islamic Maybank Malaysia for a period of sensitivity of ≤ 1 month and >1-3 months show a significant difference, while the period of sensitivity >3-12 months does not. The result shows, even though Indonesia and Malaysia using same dual banking systems, the gap values are different. The difference in debt policy between Indonesia and Malaysia also affecting the gap sensitivity in debt. In can be concluded that each country needs an appropriate gap management to support its Islamic banking performance specifically.

Keywords: assets and liability management, gap management, interest rate risk, Islamic bank

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Authors: Ender Su, Kai Wen Wong, I-Ling Ju, Ya-Ling Wang

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In this study, the systemic risk change of Taiwan’s banking sector is analyzed during the financial crisis. The risk expose of each financial institutions to the whole Taiwan banking systemic risk or vice versa under financial distress are measured by conditional Value-at-Risk (CoVaR) and conditional coherent expected shortfall (CoES). The CoVaR and CoES are estimated by using vector quantile autoregression (MVMQ-CaViaR) with the daily stock returns of each banks included domestic and foreign banks in Taiwan. The daily in-sample data covered the period from 05/20/2002 to 07/31/2007 and the out-of-sample period until 12/31/2013 spanning the 2008 U.S. subprime crisis, 2010 Greek debt crisis, and post risk duration. All banks in Taiwan are categorised into several groups according to their size of market capital, leverage and domestic/foreign to find out what the extent of changes of the systemic risk as the risk changes between the individuals in the bank groups and vice versa. The final results can provide a guidance to financial supervisory commission of Taiwan to gauge the downside risk in the system of financial institutions and determine the minimum capital requirement hold by financial institutions due to the sensibility changes in CoVaR and CoES of each banks.

Keywords: bank financial distress, vector quantile autoregression, CoVaR, CoES

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Authors: Adel Ali Elshaibani

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Risk management indicators augment the reporting infrastructure, particularly for the board and senior management, to identify, monitor, and manage risks. This enhancement facilitates improved decision-making throughout the banking organization. Decision tree analysis is a tool that visually outlines potential outcomes, costs, and consequences of complex decisions. It is particularly beneficial for analyzing quantitative data and making decisions based on numerical values. By calculating the expected value of each outcome, decision tree analysis can help assess the best course of action. In the context of banking, decision tree analysis can assist lenders in evaluating a customer’s creditworthiness, thereby preventing losses. However, applying these tools in developing countries may face several limitations, such as data availability, lack of technological infrastructure and resources, lack of skilled professionals, cultural factors, and cost. Moreover, decision trees can create overly complex models that do not generalize well to new data, known as overfitting. They can also be sensitive to small changes in the data, which can result in different tree structures and can become computationally expensive when dealing with large datasets. In conclusion, while risk management indicators and decision tree analysis are beneficial for decision-making in banks, their effectiveness is contingent upon how they are implemented and utilized by the board of directors, especially in the context of developing countries. It’s important to consider these limitations when planning to implement these tools in developing countries.

Keywords: risk management indicators, decision tree analysis, developing countries, board of directors, bank performance, risk management strategy, banking institutions

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Authors: İlhami Karahanoglu, Oguz Ceylan

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As its well-known definitions; systemic risk refers to whole economic system down-turn movement even collapse together in very severe cases. In fact, it points out the contagion effects of the defaults. Such a risk is can be depicted with the famous Chinese game of falling domino stones. During and after the Bear & Sterns and Lehman Brothers cases, it was well understood that there is a very strong effect of systemic risk in financial services sector. In this study, we concentrate on the existence of systemic risk in Turkish Banking Sector based upon the Halkbank Case during the end month of 2013; there was a political turmoil in Turkey in which the close relatives of the upper politicians were involved in illegal trading activities. In that operation, the CEO of Halkbank was also arrested and in investigation, Halkbank was considered as part of such illegal actions. That operation had an impact on Halkbanks stock value. The Halkbank stock value during that time interval decreased remarkably, the distributional profile of stock return changed and became more volatile as well as more skewed. In this study, the daily returns of 5 leading banks in Turkish banking sector were used to obtain 48 return distributions (for each month, 90-days-back stock value returns are used) of 5 banks for the period 12/2011-12/2013 (pre operation period) and 12/2013-12/2015 (post operation period). When those distributions are compared with timely manner, interestingly; the distribution of the 5 other leading banks in Turkey, public or private, had also distribution profiles which was different from the past 2011-2013 period just like Halkbank. Those 5 big banks, whose stock values are monitored with sub index in Istanbul stock exchange (BIST) as BN10, had more skewed distribution just following the Halkbank stock return movement during the post operation period, with lover mean value and as well higher volatility. In addition, the correlation between the stock value return distributions of the leading banks after Halkbank case, where the returns are more skewed to the left, increased (which is measured in monthly base before and after the operation). The dependence between those banks was stronger under the case where the stock values were falling compared with the normal market condition. Such distributional effect of stock returns between the leading banks in Turkey, which is valid for down sub-market (financial/banking sector) condition, can be evaluated as an evidence for the existence of contagious effect and systemic risk.

Keywords: financial risk, systemic risk, banking sector, return distribution, dependency structure

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Authors: J. Erina, I. Erins

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The goals of the present research are to estimate Six Sigma implementation in Latvian commercial banks and to identify the perceived benefits of its implementation. To achieve the goals, the authors used a sequential explanatory method. To obtain empirical data, the authors have developed the questionnaire and adapted it for the employees of Latvian commercial banks. The questions are related to Six Sigma implementation and its perceived benefits. The questionnaire mainly consists of closed questions, the evaluation of which is based on 5 point Likert scale. The obtained empirical data has shown that of the two hypotheses put forward in the present research Hypothesis 1 has to be rejected, while Hypothesis 2 has been partially confirmed. The authors have also faced some research limitations related to the fact that the participants in the questionnaire belong to different rank of the organization hierarchy.

Keywords: six sigma, quality, commercial banking sector, latvian

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Authors: Md. Akiz Uddin

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This research attempted to identify the determining factors that extensively persuaded customers of the First Security Islamic Bank Limited (FSIBL) to open accounts and their perception and satisfaction level towards it. Initially, a theoretical model was established based on existing literature reviews. After that, a self-administered structured questionnaire was developed, and data were collected from 180 customers of the FSIBL of Bangladesh using purposive sampling technique. The collected data were later analyzed through a statistical software. Structural Equation Modelling (SEM) was used to verify the model of the study and test the hypotheses. The study particularly examined the determinants of opening accounts, customers’ perception and their satisfaction level towards the bank on several factors like the bank’s compliance with Shariah law, use of modern technology, assurance, reliability, empathy, profitability, and responsiveness. To examine the impact of religious belief on being FSIBL clients, the study also investigates non-Muslim clients’ perception about FSIBL. The study focused on FSIBL customers only from five branches of Dhaka city. The study found that the religious beliefs is the most significant factors for Muslim customers for considering FSIBL to open an account, and they are satisfied with the services, too. However, for non-Muslim customers, other benefits like E-banking, various user-friendly services are the most significant factors for choosing FSIBL. Their satisfaction level is also statistically significant. Furthermore, even if the non- Muslim customers didn’t consider religious beliefs as determinant factors for choosing FSIBL, the respondents informed that they have trust that people who believe in shariah law are more reliable to keep money with them. These findings open up the avenue for future researchers to conduct more study in this area through employing a larger sample size and more branches and extending the current model by incorporating new variables. The study will be an important addition to the potentials of Islamic banking system, literature of service quality and customer satisfaction level, particularly in the success of Islamic banking system in Bangladesh.

Keywords: islamic banking, customers’ satisfaction, customers’ perception, shariah law

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Authors: Zaiton Osman, Phang Ing, Azaze Azizi Abd Adis, Izyanti Awg Razli, Mohd Rizwan Abd Majid, Rosle Mohidin

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This study is conducted to investigate the level of financial literacy among students taking Financial Management and Banking in Universiti Malaysia Sabah, Malaysia. Students are asked to answer basic financial literacy questions in their first class before study commence and the similar questions were given in their final week of study (after 14 weeks of study duration). The comparison on their level of financial literacy will be examined. This study is expected to yields the following findings; firstly, comparison of the level of financial literacy 'before and after' courses in finance being introduced can be revealed. Secondly, it will provide suggestion on improving the standard of teaching and learning in financial management and banking courses and lastly it will help in identifying financial courses that are important in improving the level of financial literacy among students in Malaysia.

Keywords: financial literacy, university students, personal financial planning, business and management engineering

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Authors: Seyda Can, Meryem Unulu

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Objective: Breast milk is the most fundamental nutritional element for the healthy growth and development of newborns as they supply all the necessary components. Various obstacles such as diseases of mother and child, allergies of the baby, and insufficient breastmilk affect breast-feeding adversely. The wet nursery or breast milk banking is the most important source in providing the nutrients closest to the ideal for the newborn. Despite increasing opinions about its benefits, breast milk banking practice is controversial because of reasons such as ethical problems, traditional beliefs and attitudes, security concerns of families and lack of knowledge. It is thought that the results of this study will create the data for studies to raise the awareness of the society regarding wet nursery, and milk banks. Method: The study was planned and performed in descriptive type. The population of the study consists of mothers that gave birth between October-November 2017 in a public hospital in Turkey, and the sample consisted of 205 mothers chosen by improbable sampling method from the population and accepted to participate in the study. While gathering data, a survey consisting of 33 questions designed to determine the socio-demographic characteristics and their views on wet nursery and breast milk banking. Written ethical committee and institution permit was taken. Before the interview, participants were informed about the purpose and content of the study and oral permit was taken. Result: When the distribution of 205 mothers according to their individual characteristics, it was detected that their age average was 28,16±5,23 and 63,4 of mothers (n=130) had normal delivery. It was determined that clear majority of mothers, 75,6% (n=155) had no breast-feeding problems and 75,1% (n=154) fed the baby only with breast milk. It was detected that 18,5% (n=38) would accept a stranger to be a wet nurse and 60% (n=123) would donate milk if there is a breast milk bank. It was detected 33,2 % (n=68) of participant mothers want to make use of breast milk bank if there is a situation that prevents breast feeding, 38,5 % (n=79) of mothers think breast milk bank would be problematic religiously. Statistical difference was detected between the educational status of women and the rate of wanting breast milk bank practice. As the educational status of mothers increased, their rate of wanting breast milk bank practice increased. Conclusion: It is essential that every baby is breastfed by its mother primarily. However, when this is not possible, in order to implement wet nursery and breast milk banking as an extension of national breast-feeding policy, regulations need to be made and worries should be eased. Also, organizing training programs are also really important to raise awareness of the society and mothers.

Keywords: breast feeding, breast milk, milk banks, wet nursery

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Authors: Rasheed Gbenga Jimoh, Akinbowale Nathaniel Babatunde

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The use of Automated Teller Machine (ATM) has become an important tool among commercial banks, customers of banks have come to depend on and trust the ATM conveniently meet their banking needs. Although the overwhelming advantages of ATM cannot be over-emphasized, its alarming fraud rate has become a bottleneck in it’s full adoption in Nigeria. This study examined the menace of ATM in the society another cost of running ATM services by banks in the country. The researcher developed a prototype of an enhanced Automated Teller Machine Authentication using Short Message Service (SMS) Verification. The developed prototype was tested by Ten (10) respondents who are users of ATM cards in the country and the data collected was analyzed using Statistical Package for Social Science (SPSS). Based on the results of the analysis, it is being envisaged that the developed prototype will go a long way in reducing the alarming rate of ATM fraud in Nigeria.

Keywords: ATM, ATM fraud, e-banking, prototyping

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Authors: Éva Pintér, Péter Bagó, Nikolett Deutsch, Miklós Hetényi

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The process of digital transformation has a profound influence on all sectors of the worldwide economy and the business environment. The influence of blockchain technology can be observed in the digital economy and e-government, rendering it an essential element of a nation's growth strategy. The banking industry is experiencing significant expansion and development of financial technology firms. Utilizing developing technologies such as artificial intelligence (AI), machine learning (ML), and big data (BD), these entrants are offering more streamlined financial solutions, promptly addressing client demands, and presenting a challenge to incumbent institutions. The advantages of digital transformation are evident in the corporate realm, and firms that resist its adoption put their survival at risk. The advent of digital technologies has revolutionized the business environment, streamlining processes and creating opportunities for enhanced communication and collaboration. Thanks to the aid of digital technologies, businesses can now swiftly and effortlessly retrieve vast quantities of information, all the while accelerating the process of creating new and improved products and services. Big data analytics is generally recognized as a transformative force in business, considered the fourth paradigm of science, and seen as the next frontier for innovation, competition, and productivity. Big data, an emerging technology that is shaping the future of the banking sector, offers numerous advantages to banks. It enables them to effectively track consumer behavior and make informed decisions, thereby enhancing their operational efficiency. Banks may embrace big data technologies to promptly and efficiently identify fraud, as well as gain insights into client preferences, which can then be leveraged to create better-tailored products and services. Moreover, the utilization of big data technology empowers banks to develop more intelligent and streamlined models for accurately recognizing and focusing on the suitable clientele with pertinent offers. There is a scarcity of research on big data analytics in the banking industry, with the majority of existing studies only examining the advantages and prospects associated with big data. Although big data technologies are crucial, there is a dearth of empirical evidence about the role of big data analytics (BDA) capabilities in bank performance. This research addresses a gap in the existing literature by introducing a model that combines the resource-based view (RBV), the technical organization environment framework (TOE), and dynamic capability theory (DC). This study investigates the influence of Big Data Analytics (BDA) utilization on the performance of market and risk management. This is supported by a comparative examination of Hungarian mobile banking services.

Keywords: big data, digital transformation, dynamic capabilities, mobile banking

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Authors: K. P. Sandesh, M. H. Suman

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Text processing plays an important role in information retrieval, data-mining, and web search. Measuring the similarity between the documents is an important operation in the text processing field. In this project, a new similarity measure is proposed. To compute the similarity between two documents with respect to a feature the proposed measure takes the following three cases into account: (1) The feature appears in both documents; (2) The feature appears in only one document and; (3) The feature appears in none of the documents. The proposed measure is extended to gauge the similarity between two sets of documents. The effectiveness of our measure is evaluated on several real-world data sets for text classification and clustering problems, especially in banking and health sectors. The results show that the performance obtained by the proposed measure is better than that achieved by the other measures.

Keywords: document classification, document clustering, entropy, accuracy, classifiers, clustering algorithms

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Authors: Amira Kaddour, Hedia Teraoui, Khmayes Bougatef

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The main purpose of this paper is to determine the major causes of the underdevelopment of Islamic finance in Tunisia. Indeed, it’s surprising to note that Zitouna bank established in May 2010 is the first Islamic Tunisian bank although 99% of Tunisians are Muslim and Islam is the religion of the State according to the Constitution. So we rely in our paper on the opinions of number of professors of finance and economics as educated people to prove or reject our hypothesis that the underdevelopment of Islamic finance in Tunisia can be explained by the ignorance of its main principles and advantages. Ours findings reveal that this branch of finance is still largely unknown, not only from public but also from professionals. The results obtained surprisingly show that this insignificance of Islamic banking cannot be explained by the fact that Tunisia has been governed since its independence by a secular left-wing party. Indeed, only 3% of respondents believe that legislation and regulation in Tunisia represent an obstacle to the development of Islamic finance. Moreover, respondents are not very optimistic about the future role of Islamic financing.

Keywords: Islamic banking, Islamic insurance (takaful), Islamic law (shariah), usury (riba)

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Authors: Maher Aburrous, Adel Khelifi, Manar Abu Talib

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Transactions performed by financial institutions on daily basis require XML encryption on large scale. Encrypting large volume of message fully will result both performance and resource issues. In this paper a novel approach is presented for securing financial XML transactions using classification data mining (DM) algorithms. Our strategy defines the complete process of classifying XML transactions by using set of classification algorithms, classified XML documents processed at later stage using element-wise encryption. Classification algorithms were used to identify the XML transaction rules and factors in order to classify the message content fetching important elements within. We have implemented four classification algorithms to fetch the importance level value within each XML document. Classified content is processed using element-wise encryption for selected parts with "High", "Medium" or “Low” importance level values. Element-wise encryption is performed using AES symmetric encryption algorithm and proposed modified algorithm for AES to overcome the problem of computational overhead, in which substitute byte, shift row will remain as in the original AES while mix column operation is replaced by 128 permutation operation followed by add round key operation. An implementation has been conducted using data set fetched from e-banking service to present system functionality and efficiency. Results from our implementation showed a clear improvement in processing time encrypting XML documents.

Keywords: XML transaction, encryption, Advanced Encryption Standard (AES), XML classification, e-banking security, fuzzy classification, cryptography, intelligent encryption

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Authors: Mike Tsionas

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The paper develops new indices of financial stability based on an explicit model of expected utility maximization by financial institutions subject to the classical technology restrictions of neoclassical production theory. The model can be estimated using standard econometric techniques, like GMM for dynamic panel data and latent factor analysis for the estimation of co-variance matrices. An explicit functional form for the utility function is not needed and we show how measures of risk aversion and prudence (downside risk aversion) can be derived and estimated from the model. The model is estimated using data for Eurozone countries and we focus particularly on (i) the use of the modeling approach as an “early warning mechanism”, (ii) the bank- and country-specific estimates of risk aversion and prudence (downside risk aversion), and (iii) the derivation of a generalized measure of risk that relies on loan-price uncertainty.

Keywords: financial stability, banking, expected utility maximization, sub-prime crisis, financial crisis, eurozone, PIIGS

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Authors: Abdul Rauf, Xiaoxing Liu, Rizwan Qaisar Danish, Waqas Amin

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The core intention of this study is to analyze the linkage of training, job attitudes and motivation through a mediation model in the banking sector of Pakistan. Moreover, this study is executed to answer a range of queries regarding the consideration of employees about training, job satisfaction, motivation and organizational commitment. Hence, the association of training with job satisfaction, job satisfaction with motivation, organizational commitment with job satisfaction, organization commitment as independently with motivation and training directly related to motivation is determined in this course of study. A questionnaire crafted for comprehending the purpose of this study by including four variables such as training, job satisfaction, motivation and organizational commitment which have to measure. A sample of 450 employees from seventeen private (17) banks and two (2) public banks was taken on the basis of convenience sampling from Pakistan. However, 357 questionnaires, completely filled were received back. AMOS used for assessing the conformity factor analysis (CFA) model and statistical techniques practiced to scan the collected data (i.e.) descriptive statistics, regression analysis and correlation analysis. The empirical findings revealed that training and organizational commitment has a significant and positive impact directly on job satisfaction and motivation as well as through the mediator (job satisfaction) also the impact sensing in the same way on the motivation of employees in the financial Banks of Pakistan. In this research study, the banking sector is under discussion, so the findings could not generalize on other sectors such as manufacturing, textiles, telecom, and medicine, etc. The low sample size is also the limitation of this study. On the foundation of these results the management fascinates to make the revised strategies regarding training program for the employees as it enhances their motivation level, and job satisfaction on a regular basis.

Keywords: job satisfaction, motivation, organizational commitment, Pakistan, training

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Authors: Lianne M. Q. Lee, Mohammed Sharaf Shaiban

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The importance of bank liquidity management took center stage as policy makers promoted a more resilient global banking system after the market turmoil of 2007. The growing recognition of Islamic banks’ function of intermediating funds in the economy warrants the need to investigate its balance sheet structure which is distinct from its conventional counterparts. Given that asymmetric risk, transformation is inevitable; Islamic banks need to identify the liquidity risk within their distinctive balance sheet structure. Thus, there is a strong need to quantify and assess the liquidity position to ensure proper functioning of a financial institution. It is vital to measure bank liquidity because liquid banks face less liquidity risk. We examine this issue by using two alternative quantitative measures of liquidity creation “cat fat” and “cat nonfat” constructed by Berger and Bouwman (2009). “Cat fat” measures all on balance sheet items including off balance sheet, whilst the latter measures only on balance sheet items. Liquidity creation is measured over the period 2007-2014 in 14 countries where Islamic and conventional commercial banks coexist. Also, separately by bank size class as empirical studies have shown that liquidity creation varies by bank size. An interesting and important finding shows that all size class of Islamic banks, on average have increased creation of aggregate liquidity in real dollar terms over the years for both liquidity creation measures especially for large banks indicating that Islamic banks actually generates more liquidity to the economy compared to its conventional counterparts, including from off-balance sheet items. The liquidity creation for off-balance sheets by conventional banks may have been affected by the global financial crisis when derivatives markets were severely hit. The results also suggest that Islamic banks have the higher volume of assets and deposits and that borrowing/issues of bonds are less in Islamic banks compared to conventional banks because most products are interest-based. As Islamic banks appear to create more liquidity than conventional banks under both measures, it translates that the development of Islamic banking is significant over the decades since its inception. This finding is encouraging as, despite Islamic banking’s overall size, it represents growth opportunities for these countries.

Keywords: financial institution, liquidity creation, liquidity risk, policy and regulation

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Authors: M. Khasro Miah, Chowdhury Hossan Golam, Muhammed Siddique Hossain

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Recently, financial institution brand image is turning out to be pretty weak due to the presence of strong local competitors and this in term is affecting their firm performance also. In this study, four major HR practices, namely employee commitment, empowerment, loyalty, and engagement are considered in order to measure its effects on the brand and financial performance of banking organization. This study finds that the banking institutions of Bangladesh are more customer oriented rather than internal employee oriented, which makes it quite obvious that the internal HR practices will have little or no effect on the banks brand performance. Employee Commitment has emerged out to be the most important predictor, followed by employee loyalty and empowerment. The employees are well-empowered, engaged, and shows loyalty towards the organization, but their activities are not well linked with the brand. Firms should concentrate to create a congenial working atmosphere and employees should feel like a part of the organization.

Keywords: HR in bank, employee commitment, empowerment, finance, employee commitment, loyalty and engagement

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Authors: M. Erol Genevois, D. Celik, H. Z. Ulukan

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Automated teller machines (ATMs) can be considered among one of the most important service facilities in the banking industry. The investment in ATMs and the impact on the banking industry is growing steadily in every part of the world. The banks take into consideration many factors like safety, convenience, visibility, cost in order to determine the optimum locations of ATMs. Today, ATMs are not only available in bank branches but also at retail locations. Another important factor is the cash management in ATMs. A cash demand model for every ATM is needed in order to have an efficient cash management system. This forecasting model is based on historical cash demand data which is highly related to the ATMs location. So, the location and the cash management problem should be considered together. Although the literature survey on facility location models is quite large, it is surprising that there are only few studies which handle together ATMs location and cash management problem. In order to fulfill the gap, this paper provides a general review on studies, efforts and development in ATMs location and cash management problem.

Keywords: ATM location problem, cash management problem, ATM cash replenishment problem, literature review in ATMs

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Authors: Sadiq J. Abou-Loukh, Hanan M. Habbi

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This paper presents a steganography to hide the transmitted information without excite suspicious and also illustrates the level of secrecy that can be increased by using cryptography techniques. The proposed system has been implemented firstly by encrypted image file one time pad key and secondly encrypted message that hidden to perform encryption followed by image embedding. Then the new image file will be created from the original image by using four triangles operation, the new image is processed by one of two image processing techniques. The proposed two processing techniques are thresholding and differential predictive coding (DPC). Afterwards, encryption or decryption keys are generated by functional key generator. The generator key is used one time only. Encrypted text will be hidden in the places that are not used for image processing and key generation system has high embedding rate (0.1875 character/pixel) for true color image (24 bit depth).

Keywords: encryption, thresholding, differential predictive coding, four triangles operation

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Authors: Onyinyechi Joy Kingdom

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Mergers and Acquisitions (M&A) have been proposed as a mechanism through which, problems associated with inefficiency or poor performance in financial institution could be addressed. The aim of this study is to examine the proposition that recapitalization of banks, which encouraged Mergers and Acquisitions in Nigeria banking system, would strengthen the domestic banks, improve financial deepening and the confidence of depositors. Hence, this study examines the impact of the 2005 M&A in the Nigerian-banking sector on financial deepening using mixed method (quantitative and qualitative approach). The quantitative process of this study utilised annual time series for financial deepening indicator for the period of 1997 to 2012. While, the qualitative aspect adopted semi-structured interview to collate data from three merged banks and three stand-alone banks to explore, understand and complement the quantitative results. Furthermore, a framework thematic analysis is employed to analyse the themes developed using NVivo 11 software. Using the quantitative approach, findings from the equality of mean test (EMT) used suggests that M&A have significant impact on financial deepening. However, this method is not robust enough given its weak validity as it does not control for other potential factors that may determine financial deepening. Thus, to control for other factors that may affect the level of financial deepening, a Multiple Regression Model (MRM) and Interrupted Times Series Analysis (ITSA) were applied. The coefficient for M&A dummy turned negative and insignificant using MRM. In addition, the estimated linear trend of the post intervention when ITSA was applied suggests that after M&A, the level of financial deepening decreased annually; however, this was statistically insignificant. Similarly, using the qualitative approach, the results from the interview supported the quantitative results from ITSA and MRM. The result suggests that interest rate should fall when capital base is increased to improve financial deepening. Hence, this study contributes to the existing literature the importance of other factors that may affect financial deepening and the economy when policies that will enhance bank performance and the economy are made. In addition, this study will enable the use of valuable policy instruments relevant to monetary authorities when formulating policies that will strengthen the Nigerian banking sector and the economy.

Keywords: mergers and acquisitions, recapitalization, financial deepening, efficiency, financial crisis

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Authors: Amir Hossein Ghaffari Nejad, Forouhar Ferdowsi, Reza Mashhadi

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In the interest-free banking system of Iran, the savings of society are in the form of bank deposits, and banks using the Islamic contracts, allocate the resources to applicants for obtaining facilities and credit. In the meantime, the central bank, with the aim of introducing monetary policy, determines the maximum interest rate on bank deposits in terms of macroeconomic requirements. But in recent years, the country's economic constraints with the stagflation and the consequence of the institutional weaknesses of the financial market of Iran have resulted in massive disturbances in the balance sheet of the banking system, resulting in a period of mismatch maturity in the banks' assets and liabilities and the implementation of a Ponzi game. This issue caused determination of the interest rate in long-term bank deposit contracts to be associated with non-observance of the maximum rate set by the central bank. The result of this condition was in the allocation of new sources of equipment to meet past commitments towards the old depositors and, as a result, a significant part of the supply of equipment was leaked out of the facilitating cycle and credit crunch emerged. The purpose of this study is to identify the most important factors affecting the occurrence of non-confirmatory financial banking behavior using data from 19 public and private banks of Iran. For this purpose, the causes of this non-confirmatory behavior of banks have been investigated using the panel vector autoregression method (PVAR) for the period of 2007-2015. Granger's causality test results suggest that the return of parallel markets for bank deposits, non-performing loans and the high share of the ratio of facilities to banks' deposits are all a cause of the formation of non-confirmatory behavior. Also, according to the results of impulse response functions and variance decomposition, NPL and the ratio of facilities to deposits have the highest long-term effect and also have a high contribution to explaining the changes in banks' non-confirmatory behavior in determining the interest rate on deposits.

Keywords: non-conformity behavior, Ponzi Game, panel vector autoregression, nonperforming loans

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Authors: Aleksandra Szunke

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Monetary policy is an important pillar of the economy, directly affecting on the condition of banking sector. Depending on the strategy may both support functioning of banking institutions, as well as limit their excessively risky activities. The literature studies indicate a large number of publications, which include characteristics of initiatives, implemented by central banks during the global financial crisis and the potential effects of the use of non-standard monetary policy instruments. However, the empirical evidence about their effects and real consequences for the financial markets are still not final. Even before the escalation of instability, Bernanke, Reinhart, and Sack (2004) analyzed the effectiveness of various unconventional monetary tools in lowering long-term interest rates in the United States and Japan. The obtained results largely confirmed the effectiveness of the zero-interest-rate policy and Quantitative Easing (QE) in achieving the goal of reducing long-term interest rates. Japan, considered as the precursor of QE policy, also conducted research about the consequences of non-standard instruments, implemented to restore financial stability of the country. Although the literature about the effectiveness of Quantitative Easing in Japan is extensive, it does not uniquely specify whether it brought permanent effects. The main aim of the study is to identify the implications of non-standard monetary policy, implemented by selected central banks (the Federal Reserve System, Bank of England and European Central Bank), paying particular attention to the consequences into three areas: the size of money supply, financial markets, and the real economy.

Keywords: consequences of modern monetary policy, quantitative easing policy, banking sector instability, global financial crisis

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Authors: Muhammad Arsalan

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The efficiency of a financial intermediation system is assessed by its ability to achieve allocative efficiency, asset transformation, and the subsequent economic development. Islamic Banking and Finance (IBF) was conceived to serve as an alternate financial intermediation system adherent to the injunctions of Islam. A critical appraisal of the state of contemporary IBF reveals that it neither fulfills the aspirations of Islamic rhetoric nor is efficient in terms of asset transformation and economic development. This paper is an intuitive pursuit to explore the economic rationale of established principles of IBF, and the reasons of the persistent divergence of IBF being accused of ruses and sophistry. Disentangling the varying viewpoints, the underdevelopment of IBF has been attributed to misinterpretation of Riba, which has been explicated through a narrow fiqhi and legally deterministic approach. It presents a critical account of how incorrect conceptualization of the key injunction on Riba, steered flawed institutionalization of an Islamic Financial intermediation system. It also emphasizes on the wrong interpretation of the ontological and epistemological sources of Islamic Law (primarily Riba), that explains the perennial economic underdevelopment of the Muslim world. Deeming ‘a collaborative and dynamic Ijtihad’ as the elixir, this paper insists on the exigency of redefining Riba, i.e., a definition that incorporates the modern modes of economic cooperation and the contemporary financial intermediation ecosystem. Finally, Riba has been articulated in an agency theoretic framework to eschew expropriation of wealth, and assure protection of property rights, aimed at realizing the twin goals of a) Shari’ah adherence in true spirit, b) financial and economic development of the Muslim world.

Keywords: agency theory, financial intermediation, Islamic banking and finance, ijtihad, economic development, Riba, information asymmetry

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Authors: Trevor Toy, Josef Langerman

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Around a quarter of the world’s data is generated by financial with an estimated 708.5 billion global non-cash transactions reached between 2018 and. And with Open Banking still a rapidly developing concept within the financial industry, there is an opportunity to create a secure mechanism for connecting its stakeholders to openly, legitimately and consensually share the data required to enable it. Integration and data sharing of anonymised transactional data are still operated in silos and centralised between the large corporate entities in the ecosystem that have the resources to do so. Smaller fintechs generating data and businesses looking to consume data are largely excluded from the process. Therefore there is a growing demand for accessible transactional data for analytical purposes and also to support the rapid global adoption of Open Banking. The following research has provided a solution framework that aims to provide a secure decentralised marketplace for 1.) data providers to list their transactional data, 2.) data consumers to find and access that data, and 3.) data subjects (the individuals making the transactions that generate the data) to manage and sell the data that relates to themselves. The platform also provides an integrated system for downstream transactional-related data from merchants, enriching the data product available to build a comprehensive view of a data subject’s spending habits. A robust and sustainable data market can be developed by providing a more accessible mechanism for data producers to monetise their data investments and encouraging data subjects to share their data through the same financial incentives. At the centre of the platform is the market mechanism that connects the data providers and their data subjects to the data consumers. This core component of the platform is developed on a decentralised blockchain contract with a market layer that manages transaction, user, pricing, payment, tagging, contract, control, and lineage features that pertain to the user interactions on the platform. One of the platform’s key features is enabling the participation and management of personal data by the individuals from whom the data is being generated. This framework developed a proof-of-concept on the Etheruem blockchain base where an individual can securely manage access to their own personal data and that individual’s identifiable relationship to the card-based transaction data provided by financial institutions. This gives data consumers access to a complete view of transactional spending behaviour in correlation to key demographic information. This platform solution can ultimately support the growth, prosperity, and development of economies, businesses, communities, and individuals by providing accessible and relevant transactional data for big data analytics and open banking.

Keywords: big data markets, open banking, blockchain, personal data management

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Authors: Emilia Klepczarek

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The Basel Committee on Banking Supervision and the OECD found problems with the mechanisms of corporate governance as one of the major causes of destabilization of the financial system and the subprime crisis in the years 2007-2010. In response to these allegations, there were formulated a number of recommendations aimed at improving the quality of supervisory standards in financial institutions. They relate mainly to risk management, remuneration policy, the competence of managers and board members and transparency issues. Nevertheless, a review of the empirical research conducted by the author does not allow for an unambiguous confirmation of the positive impact of the postulated standards on the stability of banking entities. There is, therefore, a presumption of the existence of hidden variables determining the effectiveness of the governance mechanisms. According to the author, this involves concepts arising from behavioral economics and economic anthropology, which allow for an explanation of the effectiveness of corporate governance institutions on the basis of the socio-cultural profile of its members. The proposed corporate governance culture theory indicates that the attributes of the members of the organization and organizational culture can determine the different effectiveness level of the governance processes in similar formal corporate governance structures. The aim of the presentation is, firstly, to draw attention to the vast discrepancies existing within the results of research on the effectiveness of the standards of corporate governance in the banking sector. Secondly, the author proposes an explanation of these differences on the basis of governance theory breaking with common paradigms. The corporate governance culture theory is focused on the identity of the individual and the scope of autonomy offered within his or her institution. The coexistence of these two conditions - the adequate behavioral profile and enough freedom to decide - is a prerequisite for the efficient functioning of the institutions of corporate governance, which can contribute to rehabilitating and strengthening the stability of the financial sector.

Keywords: autonomy, corporate governance, efficiency, governance culture

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Authors: Bangwon Seo

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In this paper, we consider multicast device-to-device (D2D) direct communication systems in cellular networks. In multicast D2D communications, nearby mobile devices exchanges, their data directly without going through a base station and a D2D transmitter send its data to multiple D2D receivers that compose of D2D multicast group. We consider wiretap channel where there is an eavesdropper that attempts to overhear the transmitted data of the D2D transmitter. In this paper, we propose a secure transmission scheme in D2D multicast communications in cellular networks. In order to prevent the eavesdropper from overhearing the transmitted data of the D2D transmitter, a precoding vector is employed at the D2D transmitter in the proposed scheme. We perform computer simulations to evaluate the performance of the proposed scheme. Through the simulation, we show that the secrecy rate performance can be improved by selecting an appropriate precoding vector.

Keywords: device-to-device communications, wiretap channel, secure transmission, precoding

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Authors: Sunil Chaudhary, Rajendra Bahadur Thapa, Eleni Berki, Marko Helenius

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The increasing number of Internet and mobile phone users, and essentially those, who use these electronic media to perform online transactions makes Nepal lucrative for phishing attacks. It is one of the reasons behind escalating phishing attacks in the country. Therefore, in this paper we examine various phishing attempts and real scenarios in Nepal to determine the seriousness of the problem. We also want to find out how prepared are the Internet and mobile phone users and how well-equipped are the private sector and government authorities responsible to handle cybercrime in the country. We considered five areas of research study, i.e., legal measures, technical and procedural measures, organizational structure, capacity building and international cooperation. These constitute important factors in cyber security and are recommended by the Global Cyber security Agenda (GCA). On the basis of our findings, we provide essential suggestions to make anti-phishing measures more appropriate to Nepalese State and society.

Keywords: internet banking, mobile banking, e-commerce, phishing, anti-phishing, Nepal

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Authors: Ahmad Mohammad Al-Harahsheh

Abstract:

Anti-language reflects anti-society; it is a restricted spoken code used among a group of interlocutors because of anti-society. This study aims to shed light on the sociolinguistic characteristics of anti-language used by prisoners in Jordan. The participants included were 15 male-Jordanian prisoners who have recently been released. The data were written, transliterated, and analyzed on the basis of sociolinguistics and discourse analysis. This study draws on sociolinguistic theory of language codes as the theoretical framework. The study concludes that anti-language is a male language and is used for secrecy, as the prisoners' tendency to protect themselves from the police; it is a verbal competition, contest and display. In addition, it is employed to express obnoxious ideas and acts by using more pleasant or blurred words and expressions. Also, the anti-language used by prisoners has six linguistic characteristics in JSA (Jordanian Spoken Arabic), such as relexicalization, neologism, rhyme formation, semantic change, derivation, and metaphorical expressions.

Keywords: anti-language, Jordanian Spoken Arabic, sociolinguistics, prisoners

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Authors: Tomola Obamuyi

Abstract:

The banking system in Nigeria adopted innovative banking, with the aim of enhancing financial inclusion, and making financial services readily and cheaply available to majority of the people, and to contribute to the efficiency of the financial system. Some of the innovative services include: Automatic Teller Machines (ATMs), National Electronic Fund Transfer (NEFT), Point of Sale (PoS), internet (Web) banking, Mobile Money payment (MMO), Real-Time Gross Settlement (RTGS), agent banking, among others. The introduction of these payment systems is expected to increase bank efficiency and customers' satisfaction, culminating in better performance for the commercial banks. However, opinions differ on the possible effects of the various innovative payment systems on the performance of commercial banks in the country. Thus, this study empirically determines how commercial banks use innovation to gain competitive advantage in the specific context of Nigeria's finance and business. The study also analyses the effects of financial innovation on the performance of commercial banks, when different periods of analysis are considered. The study employed secondary data from 2009 to 2018, the period that witnessed aggressive innovation in the financial sector of the country. The Vector Autoregression (VAR) estimation technique forecasts the relative variance of each random innovation to the variables in the VAR, examine the effect of standard deviation shock to one of the innovations on current and future values of the impulse response and determine the causal relationship between the variables (VAR granger causality test). The study also employed the Multi-Criteria Decision Making (MCDM) to rank the innovations and the performance criteria of Return on Assets (ROA) and Return on Equity (ROE). The entropy method of MCDM was used to determine which of the performance criteria better reflect the contributions of the various innovations in the banking sector. On the other hand, the Range of Values (ROV) method was used to rank the contributions of the seven innovations to performance. The analysis was done based on medium term (five years) and long run (ten years) of innovations in the sector. The impulse response function derived from the VAR system indicated that the response of ROA to the values of cheques transaction, values of NEFT transactions, values of POS transactions was positive and significant in the periods of analysis. The paper also confirmed with entropy and range of value that, in the long run, both the CHEQUE and MMO performed best while NEFT was next in performance. The paper concluded that commercial banks would enhance their performance by continuously improving on the services provided through Cheques, National Electronic Fund Transfer and Point of Sale since these instruments have long run effects on their performance. This will increase the confidence of the populace and encourage more usage/patronage of these services. The banking sector will in turn experience better performance which will improve the economy of the country. Keywords: Bank performance, financial innovation, multi-criteria decision making, vector autoregression,

Keywords: Bank performance, financial innovation, multi-criteria decision making, vector autoregression

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