The impact of the Internet in banking: observations and evidence from developed and emerging markets

This paper investigates the risk, efficiency and rate of progress in the implementation of electronic commerce (e-commerce) in a sample of banks from a developed country (the US), and a sample of banks from developing and emerging markets. The results confirm that the US is very advanced in its electronic-banking (e-banking) actuation. There is evidence suggesting that e-banking is driven largely by the prospects of operating costs minimisation and operating revenue maximisation. Costs are lower and revenues higher when banking services are delivered through a branch network. The results also suggest that perceptions of banking risk may be partially driven by similar factors. Using a basic risk-scoring model, bank risk scores (reflecting a bankʹs ability to repay depositors) are regressed against operating efficiency measures.