Digital transformation, banking stability, and financial inclusion in<scp>Sub‐Saharan</scp>Africa

Sodokin, Koffi; Koriko, Moubarak; Lawson, Dzidzogbé Hechely; Couchoro, Mawuli Kodjovi

doi:10.1002/jsc.2531

Cited by 8 publications

(7 citation statements)

References 54 publications

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“…Z-score is widely implemented to measure bank stability which can be used to compute the overall stability of business models (Köhler, 2015). The higher Z-score, the better stability and low exposure of insolvency probability (Sodokin et al , 2022). We use logarithm in the empirical analysis to improve goodness of fit and minimize the possibility of simultaneous bias following Beck et al (2013), Moudud-Ul-Huq et al (2018), Risfandy et al (2022) and Amidu and Wolfe (2013): …”

Section: Methodsmentioning

confidence: 99%

“…This study measures digital strategy by implementing dummy variable for the Chief Digital Officer (CDO), fintech alliances and digital disclosure following Hornuf et al (2021). The proxies capture banks’ strategy to adapt and use digital technology to gain better performance (Hornuf et al , 2021; Sodokin et al , 2022).…”

Section: Methodsmentioning

confidence: 99%

“…This investigation is essential, as bank risk-taking becomes more complex with the rapid development of technology and the entrant of financial technology (FinTech) firms. In a recent paper, Sodokin et al (2022) highlight the relationship between digital implementation and bank stability in Sub-Saharan Africa. Uddin et al (2020) focus on examining the relationship between CyberTech expenditures and bank stability globally in 43 countries.…”

Section: Introductionmentioning

confidence: 99%

“…Resource-based theory and Schumpeter theory of innovation state that the enhancement of technology increases opportunities for better performance and stability (Shanmugam and Nigam, 2020). Digital innovation in banking can help banks to gain better stability in a long run (Ozili, 2018; Pierri and Timmer, 2022; Daoud et al , 2016; Sodokin et al , 2022; Uddin et al , 2020). In addition, partnerships with non-bank institutions such as financial technology company might benefit bank competitiveness and improve performance (Klus et al , 2019).…”

Section: Introductionmentioning

confidence: 99%

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Enhancing bank stability from diversification and digitalization perspective in ASEAN

Lestari

Jun

2023

SEF

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Purpose The financial sector's resilience is associated with greater prosperity and a better average income. Banks have evolved their business model and diversified their sources of income, and bank digitalization has become one of the prominent strategies. The purpose of this study is to examine how bank service expansion represented by revenue diversification activities and digital strategy will enhance bank stability in ASEAN countries from 2010 to 2021. Design/methodology/approach This study uses information from the Datastream database and banks’ annual reports to measure bank stability, diversification and market power, which also provide information for bank digital strategy. This study uses the two-step system generalized method of moments to investigate the effect of diversification and digitalization on bank stability in ASEAN. Findings The results of this study show that bank revenue diversification has no effect on bank stability, and the presence of the chief digital officer and digital disclosure improves banks’ stability. However, alliance strategy with financial technology companies does not significantly impact bank stability and might increase bank risk. Practical implications The findings of this study provide relevant policy implications: the regulation should support bank business to diversify the source of income; regulators and policymakers should regulate and enhance the Information and Communication Technology infrastructure; and banks should design their strategy comprehensively. Originality/value This study provides new evidence of the essential role of digital strategy in enhancing bank stability in ASEAN. In addition, this study also shows how banks diversify their business in a competitive environment.

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Enhancing bank stability from diversification and digitalization perspective in ASEAN

Lestari

Jun

2023

SEF

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“…Financial shocks impact even corporate social responsibility (CSR), as based on the results of Karmani et al (2023) in the period of financial distress, firms were more active in the field of CSR. Credit shocks also influence the digital financial inclusion, as digital transformation is more substantial if the banking sector is stable (Sodokin et al, 2022).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Accelerate or brake?—The connection of credit gaps and economic disequilibrium

Fazekas,

Póta,

Becsky‐Nagy

2024

Strategic Change

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Credit supply shocks significantly aggravate the impact of economic recessions. Understanding the underlying reasons why credit market shocks occur and detecting the market turbulences in time can give a decision support tool for the economic policy to intervene more efficiently on the market and to reduce the effect of economic downturns. The goal of the current article is to investigate the factors that signal possible credit shocks by analyzing the quarterly data of 17 European countries over the period 1995–2021. The focus of the article is on the credit given to the nonfinancial corporations. In our analysis, we have built on the credit gap methodology by determining the deviations of the lending activity from its trend, and then we have modeled these credit gaps using fundamental macroeconomic indicators, such as the balance of the current account, the ratio of short‐ and long‐term capital investments and government debt. Our conclusion is that in the presence of fundamental disequilibrium in the economy excessive lending creates positive credit gaps that increase the chance of negative credit market shocks. According to our new findings, the existing credit gap methodology can be improved by incorporating real economic factors; slowing long‐term capital investment and increasing the deficit of the current account signal the emergence of a credit gap. We found significant regional heterogeneity as in Southern European countries, and the credit gaps were more substantial. Among the investigated macroeconomic factors, the governmental indebtedness was especially high in these countries suggesting that countries with high public debt rates are more prone to develop credit gaps.

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Impact of Mobile Money on Resilience to Health Shocks in Sub-Saharan Africa: Evidence from Togo

Ayayi,

Dout,

Yekpa

et al. 2024

J Knowl Econ

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Digital transformation, banking stability, and financial inclusion inSub‐SaharanAfrica

Cited by 8 publications

References 54 publications

Enhancing bank stability from diversification and digitalization perspective in ASEAN

Enhancing bank stability from diversification and digitalization perspective in ASEAN

Accelerate or brake?—The connection of credit gaps and economic disequilibrium

Impact of Mobile Money on Resilience to Health Shocks in Sub-Saharan Africa: Evidence from Togo

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