Banking performance impacted by digitalization: a study of Moroccan banks

Abstract

In 2023, Morocco's Internet penetration rate will reach 88.1%, compared with 84.1% the previous year. The indicator expresses the percentage of the population using the Internet. In recent years, the number of Internet users in Morocco has increased overall.

This accelerated pace of Internet penetration in Morocco has opened up new opportunities for all businesses, and particularly for the banking sector. Banks are now using the electronic mode to provide services like never before. They offer a range of digital services from opening a bank account to applying for a loan using the Internet. Studies on digitization or online banking have mainly been limited to the aspect of making bank customers satisfied online. Some found that online banking had a positive impact on customer satisfaction, such as Belvaux and Notebaert in 2015, while others pointed out that customers preferred to visit branches rather than use online services, the resistant, according to Faran in 2018. The authors believe that there is a dearth of literature on the effects of digitization on bank performance. This paper aims to fill this gap by investigating the effects of digitization on bank performance through interviews with 39 employees from 13 banks. To analyze bank performance, three factors are examined: efficiency, cost effectiveness and challenges.

Digitization was found to be positively associated with all three study variables. It has improved banks' performance and enabled them to move from basic banking services to comprehensive financial solutions, However, it should be noted that this study is based on interviews with a specific sample of bank employees, which may limit the generalisability of the findings to the banking industry as a whole. Furthermore, the research focuses on the Moroccan context, which could influence the transferability of the findings to other geographical and cultural contexts. To obtain a more in-depth and comprehensive understanding of the effects of digitalisation on bank performance, future research could broaden the sample and consider additional aspects.

Key words: digitization, banking, performance, internet

JEL Classification: G21, G24, M15, N27, O3

Paper type: empirical article