The Effects of Technological Innovation on the Banking Sector

Significant changes have affected the banking sector worldwide due to the major impact of developments and trends in information and communication technology, business intelligence, and risk management strategies. The basic issue to be addressed no longer concerns changes in the banking sector but the ways to better operate in the new business setting in order to redefine relationships with customers, seize the opportunities provided by the innovation processes, and yield adequate returns. A bank willing to progress has to continuously adapt to the evolving economic, financial, and productive context. This work argues about the influence of the advancement and complexity of emerging technologies on the structural and behavioral elements meant as financial criticalities and requirements restricting the strategic development options of banks. Verification of the research hypotheses was made through an empirical analysis of quantitative and qualitative data regarding the period 2008–2011 gathered from a sample of 3190 banks located in 17 countries. The empirical research shows (1) the existence of a negative relationship between financial leverage and the two technological innovations regarding enterprise resource planning software systems and software for management of credit risk were observed; (2) the enterprise resource planning innovation and the software for the management of credit risk seem to influence competences, abilities, and organization of the banking system; (3) the innovations that concern the enterprise resource planning software systems and the software for the management of credit risk increase the earning margin of banks. © 2015, Springer Science+Business Media New York.