Essays on the econometric analysis of electronic banking in Greece

  • Georgia Giordani

Student thesis: Doctoral Thesis


Economic integration within and across countries, deregulation, advances in telecommunications and the growth of the Internet and other communication technologies have dramatically changed the nature and structure of financial services (Claessens et al., 2003).

This study examines the adoption of electronic banking (e-banking) services offered by commercial banks in Greece. This is the first empirical investigation on the adoption of e-banking using a logit econometric model which contains a set of new independent variables such as high branch fees, branch dissatisfaction and access to banks‘ web pages. The findings are as follows: (i) Greek male customers are less likely to adopt e-banking while the opposite is true for young customers, (ii) higher education and income both have a positive impact on the adoption of e-banking in Greece, and (iii) homeowners are less likely to perform complex transactions, and hence they are less likely to adopt e-banking in Greece. Other variables such as the access to banks‘ web pages, the branch dissatisfaction as well as the high branch fees do not show any impact on customer‘s probability of adopting e-banking services. It is concluded that Greek customers prefer most the traditional banking because they worry about possible high electronic risk that comes with the foray into e-banking.

Moreover, we examine the economic performance of Greek ‗click and mortar‘ banks in relation to the adoption of Internet banking services using econometric models (Logit, OLS and GLS).We report that ‗click and mortar‘ banks in Greece overall have higher profits, but when technology-based scale and technology-based experience effects are considered these banks exhibit lower profitability. This could be attributed to the higher overhead expenses that these banks may suffer, due to the heavy investments in IT.

We also study the effect of Automated Teller Machines (ATMs), Information Technology (IT) investments and other determinants on the efficiency and profitability of Greek commercial banks. We find that profitability (Return on Average Assets, and Return on Average Equity), 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.

Finally, we assess the effect of ATMs on the competitive and equilibrium conditions of the Greek banking system using the Panzar Rosse model. Our results reveal that the Greek banking system is in equilibrium and is operating under perfect monopolistic conditions, while we find no significant relationship between the investment in ATMs and revenues or profit.

Our results provide recommendations to the Greek bank managers and help customers in improving relationships with new technologies and services. We report that Greek banks can attract their customers to electronic services if they design their marketing offers or value propositions according to the needs of these groups.
Date of AwardMay 2012
Original languageEnglish
Awarding Institution
  • University of Portsmouth
SupervisorChristos Floros (Supervisor), Alan Collins (Supervisor) & Guy Judge (Supervisor)

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