Measuring the Effect of Digitalization Efforts on Bank Performance

43 Pages Posted: 10 Oct 2019

See all articles by Johannes Kriebel

Johannes Kriebel

University of Muenster

Jörn Debener

University of Muenster

Date Written: September 30, 2019

Abstract

There is an ongoing debate on whether digitalization can increase bank performance and more specifically which technologies do so. The debate to date suffers from a lack of data. We suggest new measures of digitalization efforts in banks by using text mining methods on annual reports. Our results on all banks listed on the New York Stock Exchange imply that digitalization efforts improve performance for some successful cases but not in all cases. Practitioners should therefore carefully monitor the implementation of digitalization efforts. Considering technologies, business intelligence and IT infrastructure are most crucial in generating profits. Distribution channels are less important in comparison.

Keywords: digital banking, profitability paradox, text mining

JEL Classification: G21

Suggested Citation

Kriebel, Johannes and Debener, Jörn, Measuring the Effect of Digitalization Efforts on Bank Performance (September 30, 2019). Available at SSRN: https://ssrn.com/abstract=3461594 or http://dx.doi.org/10.2139/ssrn.3461594

Johannes Kriebel (Contact Author)

University of Muenster ( email )

Universitätsstraße 14-16
Münster, D-48143
Germany

Jörn Debener

University of Muenster ( email )

Universitätsstr. 14-16
Münster, D-48143
Germany

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