Possible Explanations of the Productivity and Profitability Paradox in the European Banking Industry

Abstract

The strengthening of IT resources is associated with cost savings over the medium-to-long term (as is evident from the estimates relating to technical change) and, to a certain extent — just in respect of investments in hardware and software — over the short term as well. Nevertheless, it seems that a series of factors act as an obstacle to the transformation of technological innovation into profitability and, above all, into improvements in the various components of revenues.