Evaluation of deposit banking and branchless banking applications in terms of profitability and risk

Branchless banking applications arising out of recent technological innovations in the financial field and traditinol deposit banking were assessed in terms of profitability and risk. How much do risk branchless banking aplications pose a risk for the existance of deposit banking? Shall branchless banks be able to cause such a major transformation and revolution to reduce and even destroy the share of deposit banking? Are the operating expenses main elements of affecting the profitability of deposit banking? In this study, in order to find answers to these questions, the historical development of banking, types of banking, banking products, channels of offering products to customers, rapid technological changes experienced in the last two decades and what the branchless banking arising as a result of these is have been examined. Furthermore, panel data analysis was employed by determining return on assets as fixed variable with the purpose of analysing the most effective internal factors affecting the profitability of banks through seventeen years (belonging to the period of 2000-2016) banking sector data of thirty-seven countries obtained from the World Bank, and by determining the cost to income ratio as fixed variable in order to test the general argument that branchless banking increases profitability by reducing expenses. It was concluded as a result of the analysis that net interest margin is the most effective internal factor that positively affects the return on assets, while the ratio of overdue credit receivables to gross credit receivables is the most effective internal factor that negatively affects the return on assets.