The impact of internet banking on performance and risk profile: Evidence from Australian credit unions

Abstract

This paper investigates the impact of the introduction of transactional internet banking on performance and risk profile of major credit unions in Australia. Performance was measured using the linear programming technique of data envelopment analysis and regressed on relevant explanatory variables using censored normal regression. Accounting data were used to measure risk profile and regressed on relevant explanatory variables employing OLS regression. The results show that transactional internet banking did not have a significant impact on any of these. Thus, internet banking has not proved to be a performance-enhancing tool in the context of major credit unions in Australia. It neither reduces nor enhances risk profile.