Economic reasoning of the internet service models of the credit organizations

<p>Bachelor&rsquo;s project on the topic &ldquo;Economic reasoning of the internet service models of the credit organizations&rdquo; contains 10 pictures, 4 tables and 1 appendix. 53 literature sources were used to complete this paper. Key words: Internet, banks, internet-banking, barriers, financial results.</p><p>Development of the Internet affects the way business is conducted in every sphere including bank services. Implementing internet dependent services costs resources for both integration and future support. However it is hard to precisely predict benefit caused by the service since not all the customers are eager to use it. Thus problem caused by the evaluation of the importance of provision the internet-banking service and the effect it has on the financial results of the banks is actual in the modern market.</p><p>The aim of this research is to measure the impact caused by the internet-banking on the financial outcome of the banks. In other words it is planned to build regression model which in turn will allow us to evaluate the effect stated earlier. Object of this research is banking sector in Russia and the subject is variety of tools available through internet-banking.</p><p>As a result of the literature analysis it was elicited that the majority of the existing models are built upon customer&rsquo;s attitude towards the service, various perceived factors and aome of them are also propose the methods for customers segregation which allows more convincing results. Moreover, in Russian literature this problem is studied superficially. Research novelty consists in the examination of the internet-banking from bank&rsquo;s perspective not from the client&rsquo;s. Practical importance is provided by the spread of the i-banking, hence making its analysis crucial for effective work of the banks.</p><p>The first chapter &ldquo;Theoretical aspects of the internet-banking&rdquo; emphasize upon the main advantages provided by the service, factors which affect customer&rsquo;s adoption and efficiency of the internet-banking. Furthermore, it touches upon the ways service can be marketed, alternative ways of creating the service and branchless banking.</p><p>The second chapter &ldquo;Internet-banking in Russia&rdquo; describes the technological situation in Russia in particular computer sales and Internet penetration. Also in this chapter the most secure banks were analyzed for better understanding of i-banking market in the country.</p><p>In the third chapter &ldquo;Model creation and its analysis&rdquo; we conducted regression analysis in order to create a model, which reflects the influence of internet-banking. Moreover, sample analysis was performed in this chapter.</p><p>Model was built using the sample which includes 75 Russian banks with moderately high international rating, which allowed us to interpret them as a competitive and eager to implement innovations in order to outperform their competitors.</p><p>With the help of the created model it was found out that the implementation the internet-banking has positive influence on the bank&rsquo;s loan portfolio. In order to gain accurate results different specifications were analyzed. In the result despite the fact that logarithmic specification had weaker coefficients its economic interpretation was superior. Hence, the result of the research showed that all factors equal bank&rsquo;s loan portfolio is greater on 49.1% if it has internet-banking. As a conclusion it is suitable to say that internet-banking gradually transits toward becoming obligatory service rather that optional one.</p>