Effects of technological innovations on Bank's financial perforance in industrialized countries

In this study, we analyzed the impact of electronic banking services on the profitability performance of the banks. This effect is explained in relation to ROE and ROA as a measure of banks profitability ratio in 8 industrialized countries from the period 2009 to 2013, by dynamic panel data method. In this case, LLC, IMP and PP tests are done to investigate the order of integration of the variables and the Hausmann specification test carried out to select the best model for our regression analysis. It is found that all the variables are stationary at levels with intercept and trend and Fixed Effect Model revealed as most appropriate for the regression analysis. The findings of the study indicated that overall of electronic banking systems have a significant positive effect on the bank’s benefit execution measures ROA and ROE respectively. Other results were found with an inverse relationship due to diversity in the different countries at the level of development, poor technological innovation frameworks as well as the socio cultural ideology of the customers. Keywords: Banks Performance, Return on Asset, Return on Equity, Profitability, Electronic Banking, Panel data analysis