The determinants and probability of diffusion of selected financial innovations of five universal banks in the Philippines for the period 2000-2010

• Main Authors: Ferrer, Janina Nicole L., Francisco, Jecah Grace D., Liu, Alvin Jaie T., Ng, Demi Sann
• Format: text
• Language: English
• Published: Animo Repository 2013
• Subjects: Universal banks > Philippines; Banks and banking > Philippines; Financial engineering > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18360
• Institution: De La Salle University

Financial innovations are the trump cards of players in the banking industry. This paper describes the probability that banks decide to adopt and implement a financial innovation. It also gives a glimpse of the factors that are significant to the banks' decision to adopt. Three specific innovations were chosen for the study: unit investment trust funds under products, prepaid cards under services, and risk management under production processes. And to fully understand the factors in adoption, the variables taken into consideration were: the length of time the CEO was in office, the total assets of the bank, the return on equity, and the Herfindahl-Hirschman index. While other papers would approach the topic theoretically, this paper includes an empirical study on the probability of adoption using a Probit regression model on five selected banks namely, BDO, BPI, PNB, RCBC, and UCPB, with BPI as the bank that is most likely to adopt a financial innovation.