Résumé :
The modernization of the banking sector has been a defining trend in new EU member state economies over the last decade. Financial innovations in particular have provided banks with the necessary tools to obtain competitive advantages. In this context, the aim of our research is to analyze the way in which the financial innovation represented by Internet banking services can contribute to the enhancement of the overall efficiency of Romanian banks. We apply DEA to compute the aggregate efficiency score for each of the 24 banks in our sample and, in addition, we utilize PCA to classify the banks into different operational strategies groups based on their relative efficiency scores. The results show that there are very few banks in our sample that have utilized Internet banking services in their production process to increase their level of efficiency and thus the research proposes a series of solutions and recommendations.
Mots-clés : financial innovation, Internet banking, DEA, PCA, bank performance.
Conclusion:
The banking industry has benefited tremendously from the development of the Internet. The Internet fundamentally changed the way in which banking networks are designed to meet the client demands and expectations. Despite the upsurge of Internet banking services in the process of intermediation, there is a relatively small body of academic literature that addresses the impact of these services in the banking sectors of the new EU member states, and Romania is no exception to this. Additionally, most studies overlook both financial and nonfinancial variables in order to underline the performance enhancements that a bank can achieve by employing this particular financial innovation. In our research we investigate the relationship between Internet services and bank efficiency for the Romanian banks, focusing only on the banks incorporated in Romania and eliminating the branches of foreign banks that operate in this country in order to ensure that the banks from our panel are exposed to the same legislative and macroeconomic environment. Using PCA alongside DEA, we were able to identify the Romanian banks that employ the financial innovation represented by Internet banking services in order to enhance their overall efficiency. We believe this approach provides a better understanding of this issue compared to the
simple application of DEA, as stated by other researchers, too (see for example Ho and Wu, 2009 or Serrano Cinca et al., 2011).
The results suggest that there are two business strategies practiced in the Romanian banking sector: “cost oriented” and “Internet banking oriented”. In addition, we find that only a few of the Romanian banks (i.e., Banca Transilvania and OTP Bank) are able to efficiently use Internet banking services in order to enhance their overall performances. Most of the other banks in our sample prefer a mixed approach between Internet banking services and
cost reduction strategies. These results have interesting policy implications. Citizens and businesses must be encouraged to use Internet banking in their daily activities, including deposits, payments and money transfers. This would cause a surge in the number of Internet banking users, and make these services more viable to be employed by banks in exercising efficiency enhancement strategies. As our results show, only a few banks currently do so. In a period in which the banking activity suffers due to the international financial crisis and one of the main concerns of the banks is to find solutions for the enhancement of the efficiency and the lowering of their costs, Internet banking services are gaining more ground, representing a modern approach for the attraction and retention of customers.
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