The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> Internet banking has turned out to be the nucleus issue of various studies all over the world. In India, there has been a literature gap on the issue constantly. This paper describes the current state of Internet banking in India and discusses its implications for the Indian banking industry. Empirical analyses have been conducted from a panel data of 88 banks for the period 1998-2005 to see the differences between the profiles of Internet and non-Internet banks and the impact of Internet banking upon bank's performance. The univariate analysis indicates several significant differences in the profile of banks that offer Internet banking and banks that do not. Broadly speaking, Internet banks are larger banks but have lesser equity cushions as compared to non-Internet banks. Internet banks rely heavily on non-interest income and also on deposits for funding than non-Internet banks do. Internet banks have better accounting efficiency ratios and higher returns on equity and returns on assets than non-Internet banks. However, the multiple regression results reveal that the profitability and offering of Internet banking does not have any significant association. Internet banking has gained worldwide acceptance as a new delivery channel for performing various banking transactions. It provides the opportunity to the customers to conduct banking transactions at their convenience. In fact, Internet banking refers to the use of Internet as a delivery channel for the banking services, including traditional services, such as opening an account or transferring funds among different accounts, as well as new banking services, such as electronic bill presentment and payment, which allow the customers to pay and receive the bills on a bank's website. There are two ways to offer Internet banking. First, an existing bank with physical offices can establish a website and offer Internet banking in addition to its traditional delivery channels. second, a bank may be established as a "branchless," "Internet-only," or "virtual" bank. Internet banking model offers advantages for both banks and customers. The Internet provides the banks with the ability to deliver products and services to customers at a cost that is lower than any existing mode of delivery. A survey conducted in US shows that of all the modes of transactions, Internet banking is the cheapest for the banks, as shown in Table 1. Customers benefit not only from the increased convenience but also from higher interest rates resulting from cost savings by the banks. The ability to pay higher interest rate with a much wider potential of customers, allows these banks to grow faster than traditional banks. Practically, the extent to which these banks distribute these benefits is not yet clear. It is therefore important for bankers, bank supervisors and policymakers to understand how Internet banking affects the performance of banks. Despite this attention, there is a richness of information on the nature and scope of Internet banking, but there is a scarcity of evidence about the impact of Internet banking activities among banks that have adopted it compared to those that have not done so. Our purpose is to fill significant gaps on this issue, especially with respect to the Indian banking markets, where no rigorous attempts have been undertaken to understand this aspect of the banking business. The evidence reveals no significant association between adoption of Internet banking by banks and their profitability. The influence of internet-activities of banks on their performance continues to be insignificant irrespective of what is used as performance variable following banking literature and industry norms for bank performance definitions. REVIEW OF EXISTING LITERATURE A very few attempts have been made to investigate the performance of banks that offer Internet banking. Table 2 summarizes the previous research done on the performance of Internet banks. … <s> BIB001 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> Purpose – First, to investigate the relationship between customer perception of service quality and bank financial performance in the new context of the automated banking environment in Australia. Second, to test for the mediating role of customer satisfaction in that relationship.Design/methodology/approach – Reviews a very large literature and numerous previous empirical investigations of service quality. Defines automated service quality. Proposes a mediated model linking service quality to banks' financial performance through customer satisfaction in the context of the automated retail banking, and tests it by structural equation modelling (Amos 5).Findings – Customer satisfaction is confirmed as a mediator in the relationship between automated service quality and financial performance.Research limitations/implications – Further research is indicated, to validate the relevance of the findings across different countries.Practical implications – The proposed model can guide the formulation of marketing ... <s> BIB002 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> To date, Internet banks worldwide have underperformed newly chartered traditional banks mainly because their higher overhead costs. This paper analyses whether this is a temporary phenomenon and whether Internet banks may generate scale economies in excess of those available to traditional banks and/or they (and their customers) may accumulate experience with this new business model, which may allow them to perform as well or even better than their peers, the traditional banks. To this end, we have followed the same analytical framework and methodology used by DeYoung (2001, 2002, forthcoming) for Internet banks in the United States although the limitations in the availability of data as well as the existence of different regulatory frameworks and market conditions, particularly in the retail segment, in the fifteen European Union countries have required some modifications to such methodology. The empirical analysis confirms that Internet banks show technologically based scale economies, while no conclusive evidence exists of technology based learning economies. As Internet banks get larger, the profitability gap with traditional banks shrinks. To the extent that Internet banks are struggling to prove themselves a viable business model, European authorities may encourage a larger number of consumers to use this delivery channel, by tackling consumers? security concerns. This would allow Internet banks to capture more of the potential scale efficiencies implied in our estimations. <s> BIB003 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> Purpose - Existing empirical evidence indicates internet banks worldwide have underperformed newly chartered traditional banks mainly because of their higher overhead costs. The purpose of this paper is to examine the impact of internet banking services on credit union activity. Design/methodology/approach - The impact of internet banking services on credit union over the period 1999-2006 was studied and regression equations were estimated for the growth in assets, operating expenses and return on assets as functions of portfolio characteristics, economic conditions and a dummy variable indicating if the credit union has adopted internet banking services. Findings - The operating costs of credit unions providing web access were found to be significantly higher than those credit unions which do not have any web account offerings. There is increased growth in assets for the credit unions which have worldwide web accounts although this relationship is statistically significant in only three of the eight years studied. The return on assets show that the credit unions with web accounts have similar average profitability to those credit unions that do not provide the facility of internet access to their customers. Research limitations/implications - Consideration could be given to running the regressions with the number of years the web site has been in place instead of just a dummy variable and putting in common bond dummy variables. Some common bonds are so narrow it may not pay to have internet services. Practical implications - Even though there are costs associated with providing internet services, the retention of profitability and the evidence of potentially higher asset growth rates suggest the importance of internet banking and the trend of internet banking adoption is expected to continue in the near future in the credit union industry. Originality/value - This is a pioneering study on the effect of internet banking services on the costs, growth and profitability of Credit Unions in the USA. <s> BIB004 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> The paper describes the current state of Internet banking in India and discusses its implications for the Indian banking industry. Particularly, it seeks to examine the impact of Internet banking on banks' performance and risk. Using information drawn from the survey of 85 scheduled commercial bank's websites, during the period of June 2007, the results show that nearly 57 percent of the Indian commercial banks are providing transactional Internet banking services. The univariate analysis indicates that Internet banks are larger banks and have better operating efficiency ratios and profitability as compared to non-Internet banks. Internet banks rely more heavily on core deposits for funding than non-Internet banks do. However, the multiple regression results reveal that the profitability and offering of Internet banking does not have any significant association, on the other hand, Internet banking has a significant and negative association with risk profile of the banks. <s> BIB005 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> This paper presents a hybrid approach to conducting performance measurements for Internet banking by using data envelopment analysis (DEA) and principal components analysis (PCA). For each bank, DEA is applied to compute an aggregated efficiency score based on outputs, such as web metrics and revenue; and inputs, such as equipment, operation cost and employees. The 45 combinations of DEA efficiencies of the studied banks are calculated, and used as a ranking mechanism. PCA is used to apply relative efficiencies among the banks, and to classify them into different groups in terms of operational orientations, i.e., Internet banking and cost efficiency focused orientations. Identification of operational fitness and business orientation of each firm, in this way, will yield insights into understanding the weaknesses and strengths of banks, which are considering moving into Internet banking. <s> BIB006 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> This paper seeks to examine the impact of internet banking on banks' performance and also whether, among banks offering internet banking, those that have offered it for a relatively long time outperformed those that only recently began to offer it. Using the data on financial performance of 82 scheduled commercial banks, during the period of 1998-2007, the univariate analysis indicates that experienced internet banks are larger banks and have better operating efficiency ratios and rely less on traditional source of financing in comparison to inexperienced internet banks as well as non-internet banks. In almost all other variables, there existed no statistically significant difference in the performance of experienced and inexperienced internet banks. The multiple regression results also reveal that the profitability and experience in offering of internet banking does not have any significant association. Hence, in the Indian banking context, experience in offering internet banking does not have any impact on banks' performance. <s> BIB007 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> Purpose – Online banking has attracted a great deal of attention from various bank stakeholders such as bankers, financial service participants, and regulators. The purpose of this paper is to analyze the online banking service performance of giant US and UK banks. Risk analysis is also conducted.Design/methodology/approach – This paper connects the principal component analysis (PCA) method with the data envelopment analysis (DEA) method to estimate the online banking performance. Data are collected from 2007 annual reports of giant banks in the USA and the UK including both financial and non‐financial variables.Findings – Most giant banks are performing well based on DEA analysis. Employees turn out to be a key variable that contribute most to banks' revenue. Different DEA models can be classified into cost‐ and online‐oriented models, which is consistent with existing work based on data from other nations.Originality/value – This paper presents a unique demonstration of using PCA and DEA for evaluation ... <s> BIB008 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> Automated banking applications offer wide benefits to customers and banks and it is no longer a good to have but an "essential service for survival" in this era of globalization. Automation of banking services such as internet banking, ATM banking, telephone banking or mobile banking enable bank customers to access accounts and general information on bank products and services through a personal computer, mobile phones or other intelligent devices. The use of information technology in providing banking services is becoming increasingly important day-by-day because it reduces banks' operating costs, delivers fast and accurate records and improves banks' profitability. This research categorizes the banks operating in Bangladesh into three groups based on the extent to which they are offering automated services -- fully automated, moderately automated, and not automated and investigates the impact of automation of banking services on improving financial performance of banks doing business in Bangladesh. <s> BIB009 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> This paper examines how the internet affects the financial performance of Greek banks. Using econometric models, we examine the degree to which internet has contributed to an improvement in their profitability. Our findings suggest that the adoption of internet as a banking delivery channel has no effect on the profitability of banks in terms of the ROA and the ROE financial ratios. We show that there is a reduction in the net interest margin ratio, implying a decrease in the profits gained from the interest on loans after the deduction of the interest paid to lenders. In addition, we find that there is a decrease in the net interest revenue over average assets. Moreover, our findings suggest a reduction in the operational expenses for the banks adopting internet banking. Finally, we report that assets, net loans over total assets, and equities over total assets are unaffected by the internet banking. These results are strongly recommended to managers dealing with internet technology and banking adoption. <s> BIB010 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> This study investigated the profitability performance of Nigerian banks following the full adoption of electronic banking system. The study became necessary as a result of increased penetration of electronic banking which has redefined the banking operations in Nigeria and around the world. Judgmental sampling method was adopted by utilizing data collected from ::: four Nigerian banks. These four banks are the only banks in Nigeria that have consistently retained their brand names and remain quoted in the Nigerian Stock Exchange since 1997. The ::: profitability performance of these banks was measured in terms of returns on equity (ROE) and returns on assets (ROA). With the data collected, we tested the pre- and post-adoption of ebanking performance difference between means using a standard statistical technique for independent sample at 5 percent level of significance for performance factors such as ROE and ROA. The study revealed that the adoption of electronic banking has positively and significantly improved the returns on equity (ROE) of Nigerian banks. On the other hand and on the contrary, it also revealed that e-banking has not significantly improved the returns on assets (ROA) of Nigerian banks.. The findings of this study have motivated new recommendations for bank customers, bank management and shareholders with regard to electronic banking adoption for ::: banking operations. ::: ::: Keywords : Electronic banking, returns on assets (ROA), returns on Equity (ROE), difference between means and Bank profitability performance. <s> BIB011 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> Abstract 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. <s> BIB012 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> This paper investigates the effect of automated teller machines (ATMs), information technology (IT) investments and other determinants on the efficiency and profitability of Greek commercial banks. Following the two-step procedure: 1) efficiency is derived via the non-parametric data envelopment analysis (DEA) technique under the variable returns to scale (VRS) assumption; 2) efficiency scores are linked to a series of determinants of bank efficiency using a Tobit regression model. We find that profitability (ROAA and ROAE), ATMs and capitalisation show a negative impact on the efficiency of Greek banks. We also report that banks' size, capitalisation, IT investments and ATMs do not have any effect on the ROAA or the ROAE but they have a positive effect on the fees and commissions. However, we find that ATMs have a negative effect on the net interest income. <s> BIB013 </s> The Impact of Digital Financial Services on Firm's Performance: a Literature Review <s> Results <s> AbstractE-banking has become one of the most popular methods of banking that has experienced a considerable expansion during the last few years. However, there is relative dearth of empirical studies examining the impact of e-banking on performance of banks. Though e-banking is gaining acceptance in Bangladesh, impact of e-banking on bank’s performance is yet to be established. This paper fills this gap. Using panel data of 13 banks over the period of 2003–2013, this study empirically investigated the impact of e-banking on the performance of Bangladeshi banks measured in terms of Return on Equity, Return on Assets and Net Interest Margin. Results from pooled ordinary least square analysis show that e-banking begins to contribute positively to banks’ Return on Equity with a time lag of two years while a negative impact was found in first year of adoption. Empirical findings of this study is of greater significance for the developing countries like Bangladesh because it will invoke the attention of the ban... <s> BIB014
Out of 39 studies included in this literature review, more than half (59%) of articles were published from 2011-2016 and the rest 41% were from 2006 to 2010. In 2012 there was only one study. In total 33 journals published articles related to DFS and firm financial performance. Of which 26 published each one article and five published two articles each from 2006 to 2016 (see Table3) . Most studies are empirical in nature which is understandable from the title of article wherein topic financial performance is reviewed in the literature. 97% of the selected articles in this review used the quantitative technique(s) while only one study  was found qualitative in nature. Of 39 selected articles 60% were published by top-ranked publishers like Elsevier, Emerald, Inderscience, Taylor & Francis, Wiley, and Springer. Further, the Elsevier published the most articles (8, 21%) followed by Emerald (6, 6%). The studies applied different financial, econometric, mathematical and operation research techniques to investigate the impact of different DFS on the firm's performance. Regression analysis is the most popular estimating technique which is used in more than 60% studies. Interestingly all the studies were performed in the banking sector including community and primarily internet banks. The research articles used the number of banks or their branches as sample size. The average sample size was 534, with the largest number of banks in the USA followed by European countries.The maximum sample size (6566) is used by BIB004 , while  and  investigated only one bank each. Geographically the most investigated regions were Europe followed by USA and south Asia (India, Pakistan and Bangladesh). Out of 39 studies 21 (54%) were conducted in developed countries and the remaining 17 (44%) in developing country, while one study incorporates both developing and developed countries (see Table4). BIB001 regression analysis 88 India 12 BIB005 financial ratio analysis and multivariate analysis 85 India 13 BIB007 Financial ratio analysis and multivariate analysis 82 India 14 regression analysis 82 23 countries 15 Financial ratio and multivariate analysis 72 Spain 16 BIB003 Financial ratio Analysis and The regression analysis of scale and experience 60 Europe 17  co-integration and causality approach 60 Nigeria 18 BIB009 financial ratio analysis 40 Bangladesh 19 BIB006 data envelopment and principal component analysis 32 Taiwan 20  qualitative analysis 30 Kenya 21  seemingly unrelated regression estimation and cobb-douglas production function 30 Pakistan 22 demitrescu-Hurlin panel causality tests 30 Turkey 23 (M. Kamboh and E.J. Leghari, 2016) regression analysis 30 Pakistan 24 BIB012 data envelopment and principal component analysis 24 Romania 25  regression analysis 20 Vietnam 26  regression analysis 18 Turkey 27 (Mohammad and  regression analysis 15 Jordan 28  regression analysis for bank specific financial variables 14 Turkey 29 BIB014 regression analysis 13 Bangladesh 30  regression analysis 11 NIgeria 31 BIB010 regression analysis 11 Greece 32  regression analysis 11 Romania 33 BIB013 data envelopment and regression analysis 11 Greece 34 BIB008 data envelopment and principal component analysis 10 USA & UK 35  regression analysis 8 India 36 BIB002 effect of service quality on bank profitability: structural equation modeling 4 Australia 37 BIB011 financial ratio analysis 4 Nigeria 38  activity-based-costing (ABC) 1 Estonia 39 (D.  regression analysis 1 Iran We also list the 15 most-cited articles from our literature review (see Table5) . We made the cut at 20 citations from Google Scholar as the citation for some articles was very less. These 15 studies were mainly conducted in developed countries with exception of two articles in India and Kenya. The articles in journals with higher impact factors or published by the high ranked publishers are the most-cited (citation above 100) publications. Out of 39 articles, only four publications could cross the mark of 100 citations so far. These 15 most cited articles filled the research gap, provide definitions of financial digital delivery channels, a comprehensive methodology with suitable sample size, references and paved the way for future research. In Table6, we gathered research techniques used to investigate the impact of different DFS on the firm's performance. In our literature review (39 articles) we could find eight different mathematical, financial, econometric, and operation research techniques. Most of the studies (70%) combined financial ratios and regression analysis followed by (13%) data envelopment and principal component analysis. In addition, As Table6 reveals, few authors (e.g  ,  ,  ,  ,) used one specific technique which is not used by any other author in the entire sample of review. Co-integration and causality approach 2 5 Activity-based-costing (ABC) 1 6 Propensity-score matching and difference-in-differences methods 1 7 Cobb-Douglas production function 1 8 Classification analysis method 1 We identified different dependent and independent variables used in the prior research to unfold the impact of DFS on the firm's performance. As many as 28 dependent and 16 independent variables have been identified (see Table7). Among the identified dependent variables, ROE and ROA are the most commonly used; approximately two-third of all studies cite them. The other more frequently used dependent variables include income (net, non-interest, and interest), deposits, operating expense, staff costs, efficiency ratio and average internet users. More than half (15) of dependent variables, as listed in Table7, have been tested only once or twice. Out of 16 independent variables used to inspect the impact of DFS on firm's performance, the most frequently used are; the number of ATMs, internet adoption, and internet banking. Notably, one-third of all reviewed articles cite them. The other more frequently used independent variables are the number of branches, POS, the number of employees, cards (debit or credit), website, electronic and mobile banking. Approximately One-third of all independent variables, as listed in Table7, have been tested only once or twice. In order to control the effect of other variables on the financial performance at the same time while examining the DFS relationship, many studies used different control variables. These include financial (bank size, loans, deposits etc) and economic (GDP, inflation, job growth etc), as listed in Table7.