Does financial innovation improve performance? An analysis of process innovation used in Pakistan

Par Safdar Husain Tahir, Said Shah, Fatima Arif, Gulzar Ahmad, Qaria Aziz, Muhammad Rizwan Ullah

The study aims at quantifying the impact of innovative methods of payment used in Pakistan on the efficiency ratio (ER). Secondary data issued by the State Bank of Pakistan for the period 2007-2016 is used. Through the unit root test, the issue of stationary imperfection connected with unsynchronized arrangement information is settled before using multiple regression models. The result of the study indicated a significant positive relation of transactions on the Web/Internet on ER. But the results for Automated Teller Machines (ATM), Point of Sale (POS), and Mobile Banking (MOB), were found to be statistically non-significant. Furthermore, the Granger impact appraisal revealed that no innovative products had a critical effect on ER, but they did have a significant effect on the value of transactions. Thus, it is suggested that innovative methods should be redesigned in such a way that customization would enable a customer to access all banking services and reduce transaction costs.
JEL Codes: O, O3, O31, O310


  • automation
  • service innovation
  • least developed country
  • technological change
  • bank efficiency
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