Empirical evidence of a changing operating cost structure and its impact on banks' operating profit: The case of Germany

Artikel

The financial sector is undergoing extensive changes and challenges that affect the entire market and infrastructure of financial service providers. Technological development leads to increased digitalisation and allows new business models to emerge. With regard to the banking sector, it is evident that this sector is characterized by employees and associated services. However, due to changing conditions, a decline in personnel has been recorded for many years. This raises the question as to what extent-based on contrary assumptions of the principle agency theory and the expense preference hypothesis—personnel changes influence the operational success of banks. On this basis, six hypotheses were formulated and tested. The principal component analysis method was applied to prepare the data. Afterwards, the actual analysis was carried out using a mixed method approach. The results on the basis of the years 2013-2017 showed a negative personnel development, which contributed to the improvement of the operating results of banks. Hereby it becomes evident that the business model design of savings and cooperative banks is of secondary importance.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Journal of Risk and Financial Management ; ISSN: 1911-8074 ; Volume: 13 ; Year: 2020 ; Issue: 10 ; Pages: 1-20 ; Basel: MDPI

Classification and Topics

• Classification: Wirtschaft ; General Financial Markets: General (includes Measurement and Data) ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Personnel Management; Executives; Executive Compensation ; Personnel Economics: Labor Management
• Subject: banking ; cost structure ; digitalisation ; human resources ; operating profit

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Diener, Florian
• Event: Veröffentlichung
• (who): MDPI
• (where): Basel
• (when): 2020

Further information

• DOI: doi:10.3390/jrfm13100247
• Handle: http://hdl.handle.net/10419/239310
• Last update: 10.03.2025, 11:44 AM CET