Войти

The Impact of Internet-Banking on Brick and Mortar Branches - The Case of Turkey (Onay C., Ozsoz E.)

Bank Products and Diversification Bank Profitability

Abstract The increased adoption and penetration of Internet has recently redefined the playground for retail banks. The retail banks are now offering their services majorly through their Internet banking branches. The repercussions of this change to “brick and mortar” banks have been studied in the context of developed market economies. In this paper we contribute to the literature by studying the impact of Internet banking adoption on banks’ deposit collection and lending activities and performance in an emerging market setting. By using a panel of 18 retail banks that operate in Turkey between 1990-2008, we show that Internet banking adoption has a positive impact on the level of deposits and loans per branch. As operational activities are now provided via Internet branches, Internet banking facilitates banking activities in branches that require more human input. Hence, banks increase personnel with a lag of one year, as they focus on their core banking activities of deposit collection and lending via branches. We also show that Internet banking adoption has a negative impact on bank profitability in the year of adoption as Internet banking increases competition and results in lower margins. Accordingly, Internet banking complements brick and mortar branches.
External link Download
Libref/ Onay C., Ozsos E. (2011) "The Impact of Internet-Banking on Brick and Mortar Branches - The Case of Turkey", pp. 1 - 25
© Программирование — Александр Красильников, 2008
    Дизайн — переработанная версия стартовой страницы ГУ–ВШЭ.