Grupos estratégicos: su influencia en el desempeño y la eficiencia de la industria bancaria venezolana y su relación con la cobertura geográfica

Esta investigación se centra en determinar los grupos estratégicos (GE) de la industria bancaria venezolana y su influencia sobre el desempeño en el sector, así como su relación con la cobertura y la exclusión geográfica, durante el período 2008-2010. El test M de Box demostró que hubo inestabilidad financiera durante este lapso de tiempo, por ello se evaluó el comportamiento de los GE en cada año de estudio. La muestra se constituyó para el año 2008 por 58 entidades financieras, en el año 2009 por 52 entidades bancarias y para el período 2010 por sólo 39 instituciones. Antes de la aplicación del análisis cluster a las variables de alcance de la estrategia y recursos comprometidos, se realizó un análisis de componentes principales para determinar la relación entre estas variables y detectar valores atípicos; mientras que para distinguir las estrategias que caracterizaron a los grupos se siguió el procedimiento de uso común propuesto por Amel y Rhoades (1988), y se reforzó con la realización de las pruebas de contraste de medias o medianas ANOVA, Scheffé, Kruskal-Wallis y U de Mann-Whitney. Se empleó el paquete estadístico SPSS (versión 15.0) y el software de sistema de información geográfica Arcgis (versión 9.2) para lograr el objetivo propuesto. Los resultados indican que: 1) Al aplicar un procedimiento estadístico es posible detectar gradaciones en la implementación o evasión de las estrategias o del compromiso de recursos por parte de los GE, 2) En momentos de inestabilidad financiera los bancos cambian de estrategia y por tanto de GE, con el fin de obtener un buen desempeño, o al menos sobrevivir, 3) Sólo hubo evidencia parcial de la validez predictiva de los grupos estratégicos, 4) Al menos en Venezuela, los GE bancarios tienden a adoptar una estrategia de cobertura geográfica acorde con su estrategia financiera y, además que, los GE difieren en el nivel de Responsabilidad Social Empresarial en la lucha contra la exclusión financiera geográfica. ABSTRACT This research focuses on identifying strategic groups (SG) of the Venezuelan banking industry and its influence on the performance in the sector and its relationship with geographical coverage and exclusion, during the period 2008-2010. Box M test showed that there was financial instability during this period, so the behavior of SG in each year of study was evaluated. The sample was established for 2008 by 58 financial institutions, in 2009 by 52 banks and for the period 2010 to only 39 institutions. Before applying the cluster analysis variables scope of the strategy and committed resources, principal component analysis was performed to determine the relationship between these variables and outliers; while distinguishing strategies that characterized the group proposed by Amel and Rhoades (1988) commonly used procedure was followed and reinforced by the performance of tests contrast mean or median ANOVA, Scheffé, Kruskal-Wallis and Mann-Whitney. SPSS (version 15.0) and software Arcgis geographic information system (version 9.2) was used to achieve the objective. The results indicate that: 1) By applying a statistical procedure can detect gradations in implementation or avoidance strategies or resource commitment by SG, 2) In times of financial instability banks change their strategy and therefore SG, in order to get a good performance, or at least survive, 3) There was only partial evidence for the predictive validity of strategic groups, 4) At least in Venezuela, banking SG tend to adopt a strategy of geographical coverage according to their financial strategy and also that the SG differ in the level of corporate social responsibility in the fight against financial exclusion Geographic.

Nonlinear dynamics in discretionary accruals: An analysis of bank loan-loss provisions

Several studies have analyzed discretionary accruals to address earnings-smoothing behaviors in the banking industry. We argue that the characteristic link between accruals and earnings may be nonlinear, since both the incentives to manipulate income and the practical way to do so depend partially on the relative size of earnings. Given a sample of 15,268 US banks over the period 1996–2011, the main results in this paper suggest that, depending on the size of earnings, bank managers tend to engage in earnings-decreasing strategies when earnings are negative (“big-bath”), use earnings-increasing strategies when earnings are positive, and use provisions as a smoothing device when earnings are positive and substantial (“cookie-jar” accounting). This evidence, which cannot be explained by the earnings-smoothing hypothesis, is consistent with the compensation theory. Neglecting nonlinear patterns in the econometric modeling of these accruals may lead to misleading conclusions regarding the characteristic strategies used in earnings management.

Who performs a stronger response to whom? Detecting individual competitive actions and reactions

This study analyzes the degree of competition through individual actions and reactions. Empirical support for this analysis has derived mainly from structural econometric models describing the nature of competition. This analysis extends the existing literature by empirically considering a direct measurement of competition through the analysis of the competitive actions and responses, and describing how firms compete within and between strategic groups. We estimate the firms’ conduct in the Spanish deposits market with 146 firms and 18,888 observations. This is a specially compelling context for the banking industry, in which a deregulation process gives rise to the adoption of aggressive strategies seeking to increase the market shares of deposit accounts; thus, producing a turbulent situation of increasing rivalry. Our results offer a deeper understanding of the firms’ competitive behavior, since we identify different patterns of actions and reactions depending upon the strategic group the firm belongs to.

Sterilization of allograft bone: is 25 kGy the gold standard for gamma irradiation?

For several decades, a dose of 25 kGy of gamma irradiation has been recommended for terminal sterilization of medical products, including bone allografts. Practically, the application of a given gamma dose varies from tissue bank to tissue bank. While many banks use 25 kGy, some have adopted a higher dose, while some choose lower doses, and others do not use irradiation for terminal sterilization. A revolution in quality control in the tissue banking industry has occurred in line with development of quality assurance standards. These have resulted in significant reductions in the risk of contamination by microorganisms of final graft products. In light of these developments, there is sufficient rationale to re-establish a new standard dose, sufficient enough to sterilize allograft bone, while minimizing the adverse effects of gamma radiation on tissue properties. Using valid modifications, several authors have applied ISO standards to establish a radiation dose for bone allografts that is specific to systems employed in bone banking. These standards, and their verification, suggest that the actual dose could be significantly reduced from 25 kGy, while maintaining a valid sterility assurance level (SAL) of 10−6. The current paper reviews the methods that have been used to develop radiation doses for terminal sterilization of medical products, and the current trend for selection of a specific dose for tissue banks.

A note on the modelling the efficiency of top Arab banks

The major aim of this research is benchmarking top Arab banks using Data Envelopment Analysis (DEA) technique and to compare the results with that of published recently in Mostafa (2007a,b) [Mostafa, M. M. (2007a). Modeling the efficiency of top Arab banks: A DEA–neural network approach. Expert Systems with Applications, doi:10.1016/j.eswa.2007.09.001; Mostafa M. M. (2007b), Benchmarking top Arab banks’ efficiency through efficient frontier analysis, Industrial Management & Data Systems, 107(6) 802–823]. Data for 85 Arab banks used to conduct the analysis of relative efficiency. Our findings indicate that (1) the efficiency of Arab banks reported in Mostafa (2007a,b) is incorrect, hence, readers should take extra caution of using such results, (2) the corrected efficiency scores suggest that there is potential for significant improvements in Arab banks. In summary, this study overcomes with some data and methodology issues in measuring efficiency of Arab banks and highlights the importance of encouraging increased efficiency throughout the banking industry in the Arab world using the new results.

Religious compliance in Islamic financial institutions

The central goal of this research is to explore the approach of the Islamic banking industry in defining and implementing religious compliance at regulatory, institutional, and individual level within the Islamic Banking and Finance (IBF) industry. It also examines the discrepancies, ambiguities and paradoxes that are exhibited in the individual and institutional behaviour in relation to the infusion and enactment of religious exigencies into compliance processes in IBF. Through the combined lenses of institutional work and a sensemaking perspective, this research portrays the practice of infusion of Islamic law in Islamic banks as being ambiguous and drifting down to the institutional and actor levels. In instances of both well-codified and non-codified regulatory frameworks for Shariah compliance, institutional rules ambiguity, rules interpretation and enactment ambiguities were found to be prevalent. The individual IBF professionals performed retrospective and prospective actions to adjust the role and rules boundaries both in the case of a Muslim and a non-Muslim country. The sensitizing concept of religious compliance is the primary theoretical contribution of this research and provides a tool to understand the nature of what constitutes Shariah compliance and the dynamics of its implementation. It helps to explain the empirical consequences of the lack of a clear definition of Shariah compliance in the regulatory frameworks and standards available for the industry. It also addresses the calls to have a clear reference on what constitute Shariah compliance in IBF as proposed in previous studies (Hayat, Butter, & Kock, 2013; Maurer, 2003, 2012; Pitluck, 2012). The methodological and theoretical perspective of this research are unique in the use of multi-level analysis and approaches that blend micro and macro perspectives of the research field, to illuminate and provide a more complete picture of religious compliance infusion and enactment in IBF.

Assessing productive efficiency of banks using integrated Fuzzy-DEA and bootstrapping:a case of Mozambican banks

Performance analysis has become a vital part of the management practices in the banking industry. There are numerous applications using DEA models to estimate efficiency in banking, and most of them assume that inputs and outputs are known with absolute precision. Here, we propose new Fuzzy-DEA α-level models to assess underlying uncertainty. Further, bootstrap truncated regressions with fixed factors are used to measure the impact of each model on the efficiency scores and to identify the most relevant contextual variables on efficiency. The proposed models have been demonstrated using an application in Mozambican banks to handle the underlying uncertainty. Findings reveal that fuzziness is predominant over randomness in interpreting the results. In addition, fuzziness can be used by decision-makers to identify missing variables to help in interpreting the results. Price of labor, price of capital, and market-share were found to be the significant factors in measuring bank efficiency. Managerial implications are addressed.

A linear relational DEA model to evaluate two-stage processes with shared inputs

Two-stage data envelopment analysis (DEA) efficiency models identify the efficient frontier of a two-stage production process. In some two-stage processes, the inputs to the first stage are shared by the second stage, known as shared inputs. This paper proposes a new relational linear DEA model for dealing with measuring the efficiency score of two-stage processes with shared inputs under constant returns-to-scale assumption. Two case studies of banking industry and university operations are taken as two examples to illustrate the potential applications of the proposed approach.

THE COSTS OF RAISING EQUITY RATIO FOR BANKS Evidence from publicly listed banks operating in Finland

The solvency rate of banks differs from the other corporations. The equity rate of a bank is lower than it is in corporations of other field of business. However, functional banking industry has huge impact on the whole society. The equity rate of a bank needs to be higher because that makes the banking industry more stable as the probability of the banks going under will decrease. If a bank goes belly up, the government will be compensating the deposits since it has granted the bank’s depositors a deposit insurance. This means that the payment comes from the tax payers in the last resort. Economic conversation has long concentrated on the costs of raising equity ratio. It has been a common belief that raising equity ratio also increases the banks’ funding costs in the same phase and these costs will be redistributed to the banks customers as higher service charges. Regardless of the common belief, the actual reaction of the funding costs to the higher equity ratio has been studied only a little in Europe and no study has been constructed in Finland. Before it can be calculated whether the higher stability of the banking industry that is caused by the raise in equity levels compensates the extra costs in funding costs, it must be calculated how much the actual increase in the funding costs is. Currently the banking industry is controlled by complex and heavy regulation. To maintain such a complex system inflicts major costs in itself. This research leans on the Modigliani and Miller theory, which shows that the finance structure of a firm is irrelevant to their funding costs. In addition, this research follows the calculations of Miller, Yang ja Marcheggianon (2012) and Vale (2011) where they calculate the funding costs after the doubling of specific banks’ equity ratios. The Finnish banks studied in this research are Nordea and Danske Bank because they are the two largest banks operating in Finland and they both also have the right company form to able the calculations. To calculate the costs of halving their leverages this study used the Capital Asset Pricing Model. The halving of the leverage of Danske Bank raised its funding costs for 16—257 basis points depending on the method of assessment. For Nordea the increase in funding costs was 11—186 basis points when its leverage was halved. On the behalf of the results found in this study it can be said that the doubling of an equity ratio does not increase the funding costs of a bank one by one. Actually the increase is quite modest. More solvent banks would increase the stability of the banking industry enormously while the increase in funding costs is low. If the costs of bank regulation exceeds the increase in funding costs after the higher equity ratio, it can be thought that this is the better way of stabilizing the banking industry rather than heavy regulation.

THE COSTS OF RAISING EQUITY RATIO FOR BANKS Evidence from publicly listed banks operating in Finland

The solvency rate of banks differs from the other corporations. The equity rate of a bank is lower than it is in corporations of other field of business. However, functional banking industry has huge impact on the whole society. The equity rate of a bank needs to be higher because that makes the banking industry more stable as the probability of the banks going under will decrease. If a bank goes belly up, the government will be compensating the deposits since it has granted the bank’s depositors a deposit insurance. This means that the payment comes from the tax payers in the last resort. Economic conversation has long concentrated on the costs of raising equity ratio. It has been a common belief that raising equity ratio also increases the banks’ funding costs in the same phase and these costs will be redistributed to the banks customers as higher service charges. Regardless of the common belief, the actual reaction of the funding costs to the higher equity ratio has been studied only a little in Europe and no study has been constructed in Finland. Before it can be calculated whether the higher stability of the banking industry that is caused by the raise in equity levels compensates the extra costs in funding costs, it must be calculated how much the actual increase in the funding costs is. Currently the banking industry is controlled by complex and heavy regulation. To maintain such a complex system inflicts major costs in itself. This research leans on the Modigliani and Miller theory, which shows that the finance structure of a firm is irrelevant to their funding costs. In addition, this research follows the calculations of Miller, Yang ja Marcheggianon (2012) and Vale (2011) where they calculate the funding costs after the doubling of specific banks’ equity ratios. The Finnish banks studied in this research are Nordea and Danske Bank because they are the two largest banks operating in Finland and they both also have the right company form to able the calculations. To calculate the costs of halving their leverages this study used the Capital Asset Pricing Model. The halving of the leverage of Danske Bank raised its funding costs for 16—257 basis points depending on the method of assessment. For Nordea the increase in funding costs was 11—186 basis points when its leverage was halved. On the behalf of the results found in this study it can be said that the doubling of an equity ratio does not increase the funding costs of a bank one by one. Actually the increase is quite modest. More solvent banks would increase the stability of the banking industry enormously while the increase in funding costs is low. If the costs of bank regulation exceeds the increase in funding costs after the higher equity ratio, it can be thought that this is the better way of stabilizing the banking industry rather than heavy regulation.

Banca Digital

Em plena quarta revolução industrial, todas as industrias se estão a transformar para se ajustar aos novos paradigmas de relação com os clientes, altamente influenciados pelos pioneiros digitais como a Uber, Netflix ou Amazon, porém no setor financeiro há desafios acrescidos, pois os clientes esperam juntar essas expectativas digitais com a manutenção da iteração humana, enquanto, do lados bancos, em simultâneo, necessitam de recuperar da crise da dívida soberana que impôs necessidades de ajustamento dos balanços. O momento de desenvolvimento tecnológico potenciado pelo forte crescimento do acesso à internet em mobilidade traz novos hábitos e expectativas na relação com as entidades, com dispositivos cada vez mais potentes a cada vez menor custo, o que criou a oportunidade perfeita para o surgimento de startups tecnológicas dispostas a transformar os modelos de negócio de intermediação clássica, dando origem, no setor financeiro, às fintechs – empresas de base tecnológica dedicadas à prestação de serviços financeiros - impondo uma disrupção na industria financeira, com destaque para mercados como os EUA e Reino Unido. Olhando aos últimos cinco anos do setor financeiro, será muito difícil antecipar como estará o setor financeiro dentro de cinco anos, mas sabemos que estará seguramente muito diferente do que conhecemos hoje, por esse fato este trabalho é assente essencialmente em referências bibliográficas dos últimos 5 anos, tendo sido feito utilizados estudos de investigação de empresas e documentos académicos para a caracterização do setor neste contexto de inovação permanente e em que medida este processo de “digitalização” do setor financeiro influencia a propensão dos clientes na contratação de mais produtos e serviços, sendo esse um fator central para os bancos em Portugal recuperarem economicamente. É também analisada a dimensão seguida pelas instituições de regulação e supervisão do setor financeiro com vista a potenciar a concorrência e inovação do setor financeiro, enquanto mantém a garantia de segurança, confiança e controlo de risco sistémico. É bastante escassa a literatura disponível para caracterizar a banca em Portugal numa ótica de inovação e transformação, porém este trabalho procura caracterizar o sistema financeiro português face à forma como está a responder aos desafios de transformação tecnológica e digital. Procurou-se estabelecer uma metodologia de investigação que permita caracterizar a perceção de valor acrescentado para os clientes da utilização de serviços digitais e em que medida estes se podem substituir aos balcões e à intervenção humana dos profissionais dos bancos, tendo-se concluído que estes dois elementos são ainda fatores centrais para os clientes.

Grupos estratégicos no sector bancário português

Dissertação de mest. Ciências Económicas e Empresariais, Faculdade de Economia, Univ. do Algarve, Instituto Superior de Economia e Gestão, Univ. Técnica de Lisboa, 2007

Domain-driven classification based on multiple criteria and multiple constraint-level programming for intelligent credit scoring

Extracting knowledge from the transaction records and the personal data of credit card holders has great profit potential for the banking industry. The challenge is to detect/predict bankrupts and to keep and recruit the profitable customers. However, grouping and targeting credit card customers by traditional data-driven mining often does not directly meet the needs of the banking industry, because data-driven mining automatically generates classification outputs that are imprecise, meaningless, and beyond users' control. In this paper, we provide a novel domain-driven classification method that takes advantage of multiple criteria and multiple constraint-level programming for intelligent credit scoring. The method involves credit scoring to produce a set of customers' scores that allows the classification results actionable and controllable by human interaction during the scoring process. Domain knowledge and experts' experience parameters are built into the criteria and constraint functions of mathematical programming and the human and machine conversation is employed to generate an efficient and precise solution. Experiments based on various data sets validated the effectiveness and efficiency of the proposed methods. © 2006 IEEE.

An ethnography of bitcoin: towards a future research agenda

Cryptocurrencies such as Bitcoin are a recent socio-technical innovation that seeks to disrupt the existing monetary system. Through mundane uses of this new digital cash, they provide a social critique of the centralised infrastructures of the banking industry. This paper outlines an ethnographic research agenda that considers how the social uptake and use of cryptocurrencies such as Bitcoin represents alternative views towards value exchange and critiques existing financial structures. We begin by arguing that the use of Bitcoin can be seen as an act of social resistance that is intended to bridge socio-economic inequalities within the context of a digital community. We then outline the disruptive nature of borderless, affordable and instantaneous international transfers in the form of remittances within social practice. Finally, we identify the possible permutations of trust that may be found in the technical affordances of Bitcoin technology and how these relate to user (pseudo)anonymity, cybertheft, cyberfraud, and consumer protection. Bringing together these three key areas, we highlight the importance of understanding the ordinary (rather than extra-ordinary) uses of cryptocurrencies such as Bitcoin. We contend that focusing upon users’ interactions with Bitcoin as a payments system and community culture will shed light upon mundane acts of socio-technical disruption, acts that critique and provide alternative financial exchange practices to the payments and regulatory financial infrastructures of the banking industry.