IDEAS home Printed from https://ideas.repec.org/a/pal/risman/v25y2023i2d10.1057_s41283-023-00116-2.html
   My bibliography  Save this article

Digitalization and stability in banking sector: a systemic risk perspective

Author

Listed:
  • Qingjun Zhang

    (Tianjin University of Finance and Economics
    Tianjin University of Finance and Economics)

  • Yiding Ou

    (Tianjin University of Finance and Economics
    Tianjin University of Finance and Economics)

  • Rong Chen

    (Tianjin University of Finance and Economics
    Tianjin University of Finance and Economics)

Abstract

This paper analyzes the relationship between digitalization and systemic risk of commercial banks using data from listed commercial banks from 2010 to 2019. The findings show that the higher the level of digital awareness and the richer the digital products, the lower the systemic risk of banks; the higher the complexity of banks’ digital organization, the higher the systemic risk of banks. The digital development of banks reduces systemic risk overall by optimizing the structure of banks’ deposits and loans, and optimizing the structure of banks' deposits and loans at other levels. The degree of impact of digitalization on the systemic risk of banks differs by their attributes, and regional commercial banks are more affected than large state-owned banks and joint-stock banks. This paper provides useful references for improving banks' refined management, establishing corresponding risk warning mechanisms, and avoiding the risks that information technology may bring.

Suggested Citation

  • Qingjun Zhang & Yiding Ou & Rong Chen, 2023. "Digitalization and stability in banking sector: a systemic risk perspective," Risk Management, Palgrave Macmillan, vol. 25(2), pages 1-29, June.
    • Handle: RePEc:pal:risman:v:25:y:2023:i:2:d:10.1057_s41283-023-00116-2
    DOI: 10.1057/s41283-023-00116-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41283-023-00116-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1057/s41283-023-00116-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cyree, Ken B & DeGennaro, Ramon P, 2002. "A Generalized Method for Detecting Abnormal Returns and Changes in Systematic Risk," Review of Quantitative Finance and Accounting, Springer, vol. 19(4), pages 399-416, December.
    2. Francisco Zabala Aguayo & Beata Ślusarczyk, 2020. "Risks of Banking Services’ Digitalization: The Practice of Diversification and Sustainable Development Goals," Sustainability, MDPI, vol. 12(10), pages 1-10, May.
    3. Marcella Lucchetta & Michele Moretto & Bruno Maria Parigi, 2018. "Systematic Risk, Bank Moral Hazard, and Bailouts," CESifo Working Paper Series 6878, CESifo.
    4. repec:zbw:bofrdp:2018_002 is not listed on IDEAS
    5. Hernando, Ignacio & Nieto, Maria J., 2007. "Is the Internet delivery channel changing banks' performance? The case of Spanish banks," Journal of Banking & Finance, Elsevier, vol. 31(4), pages 1083-1099, April.
    6. Nijskens, Rob & Wagner, Wolf, 2011. "Credit risk transfer activities and systemic risk: How banks became less risky individually but posed greater risks to the financial system at the same time," Journal of Banking & Finance, Elsevier, vol. 35(6), pages 1391-1398, June.
    7. Guseon Ji & Daniel Sungyeon Kim & Kwangwon Ahn, 2019. "Financial Structure and Systemic Risk of Banks: Evidence from Chinese Reform," Sustainability, MDPI, vol. 11(13), pages 1-22, July.
    8. Key Pousttchi & Maik Dehnert, 2018. "Exploring the digitalization impact on consumer decision-making in retail banking," Electronic Markets, Springer;IIM University of St. Gallen, vol. 28(3), pages 265-286, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Farruggio, Christian & Michalak, Tobias C. & Uhde, Andre, 2013. "The light and dark side of TARP," Journal of Banking & Finance, Elsevier, vol. 37(7), pages 2586-2604.
    2. Maik Dehnert, 2020. "Sustaining the current or pursuing the new: incumbent digital transformation strategies in the financial service industry," Business Research, Springer;German Academic Association for Business Research, vol. 13(3), pages 1071-1113, November.
    3. Maria Rosa Borges & José Zorro Mendes & André Pereira, 2019. "The Value of Information: The Impact of European Union Bank Stress Tests on Stock Markets," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 25(4), pages 429-444, November.
    4. Schaeck, K. & Silva Buston, C.F. & Wagner, W.B., 2013. "The Two Faces of Interbank Correlation," Discussion Paper 2013-077, Tilburg University, Center for Economic Research.
    5. Kevin F. Kiernan & Vladimir Yankov & Filip Zikes, 2021. "Liquidity Provision and Co-insurance in Bank Syndicates," Finance and Economics Discussion Series 2021-060, Board of Governors of the Federal Reserve System (U.S.).
    6. Ho Huy Tuu & Nguyen Huu Khoi & Svein Ottar Olsen, 2021. "How consumer innovativeness, technological expertise, and consideration set size can explain mobile commerce use: An extended understanding using a moderation–mediation model," Information Systems and e-Business Management, Springer, vol. 19(3), pages 1015-1038, September.
    7. Donal G. MCKILLOP & Barry QUINN, 2015. "Web Adoption By Irish Credit Unions: Performance Implications," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(3), pages 421-443, September.
    8. Günter Franke, 2013. "Known Unknowns in Verbriefungen," Schmalenbach Journal of Business Research, Springer, vol. 65(67), pages 1-34, January.
    9. Battaglia, Francesca & Buchanan, Bonnie G. & Fiordelisi, Franco & Ricci, Ornella, 2021. "Securitization and crash risk: Evidence from large European banks," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 72(C).
    10. Shaohua Yang & Zeyun Li & Yaxin Ma & Xingxing Chen, 2018. "Does Electronic Banking Really Improve Bank Performance? Evidence in China," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(2), pages 82-94, February.
    11. Meg Adachi-Sato & Chaiporn Vithessonthi, 2016. "Bank Systemic Risk and Corporate Investment," PIER Discussion Papers 17., Puey Ungphakorn Institute for Economic Research, revised Jan 2016.
    12. Di Gong & Shiwei Hu & Jenny Ligthart, 2015. "Does Corporate Income Taxation Affect Securitization? Evidence from OECD Banks," Journal of Financial Services Research, Springer;Western Finance Association, vol. 48(3), pages 193-213, December.
    13. Nemanja Milanović & Miloš Milosavljević & Slađana Benković & Dušan Starčević & Željko Spasenić, 2020. "An Acceptance Approach for Novel Technologies in Car Insurance," Sustainability, MDPI, vol. 12(24), pages 1-15, December.
    14. Rob Nijskens & Sylvester Eijffinger, 2011. "The Lender of Last Resort: Liquidity Provision versus the Possibility of Bailout," Chapters, in: Sylvester Eijffinger & Donato Masciandaro (ed.), Handbook of Central Banking, Financial Regulation and Supervision, chapter 4, Edward Elgar Publishing.
    15. Gilles, Philippe & Huchet, Nicolas & Gauvin, Marie-Sophie, 2012. "Politique monétaire, choix de portefeuille du secteur bancaire et canal de la prise de risque," L'Actualité Economique, Société Canadienne de Science Economique, vol. 88(2), pages 175-196, Juin.
    16. González, Luís Otero & Rodríguez Gil, Luís Ignacio & Martorell Cunill, Onofre & Merigó Lindahl, José M., 2016. "The effect of financial innovation on European banks' risk," Journal of Business Research, Elsevier, vol. 69(11), pages 4781-4786.
    17. Munteanu, Ionica, 2009. "Systemic Risk in Banking: New Approaches Under the Current Financial Crisis," MPRA Paper 25590, University Library of Munich, Germany.
    18. Brož, Václav & Kočenda, Evžen, 2022. "Mortgage-related bank penalties and systemic risk among U.S. banks," Journal of International Money and Finance, Elsevier, vol. 122(C).
    19. Ryu, Inug & Jang, Hanwool & Kim, Dongshin & Ahn, Kwangwon, 2021. "Market Efficiency of US REITs: A Revisit," Chaos, Solitons & Fractals, Elsevier, vol. 150(C).
    20. repec:ers:journl:v:volumexxi:y:2018:i:issue4:p:435-458 is not listed on IDEAS
    21. Zhen Shi & Shijiong Qin & Yung-ho Chiu & Xiaoying Tan & Xiaoli Miao, 2021. "The impact of gross domestic product on the financing and investment efficiency of China’s commercial banks," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-23, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:risman:v:25:y:2023:i:2:d:10.1057_s41283-023-00116-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.