The Effect of Business Intelligence on Bank Operational Efficiency and Perceptions of Profitability

Md. Mominur Rahman ()

FinTech, 2023, vol. 2, issue 1, 1-21

Abstract: The purpose of the study is to examine the effects of business intelligence on the bank’s operational efficiency and perceptions of profitability. The study is based on 259 responses from 27 branches of a commercial bank, employing a simple random sampling technique. This research uses the partial least square- structural equation method (PLS-SEM) method to test the hypotheses. The study verifies construct’s reliability and construct’s validity of the measurement model, and tests the fitness of the structural model. The study finds that business intelligence is positively associated with operational efficiency and profitability. Further, the study reveals that operational efficiency through business intelligence positively affects bank’s profitability. Based on competitive theory, this research states that business intelligence allows the productive entity to generate superior margins compared to its market rivals. Thus, banks can offer better options more cheaply than their rivals and thereby ensure competitive advantage. Further, based on resource-based view theory, the study argues that business intelligence as a strategic resource can provide the foundation to develop bank capabilities that can lead to superior performance over time. Therefore, the study implies business intelligence application in the banking companies and helps decision-making effectiveness for the management body of banks, academics, and policymakers.

Keywords: business intelligence; operational efficiency; profitability; resource-based view; bank performance (search for similar items in EconPapers)
JEL-codes: C6 F3 G O3 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2674-1032/2/1/8/pdf (application/pdf)
https://www.mdpi.com/2674-1032/2/1/8/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jfinte:v:2:y:2023:i:1:p:8-119:d:1077657

Access Statistics for this article

FinTech is currently edited by Ms. Lizzy Zhou

More articles in FinTech from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().