Open Access Peer-reviewed Research Article

Ensuring risk-free e-banking services in Russian-economy: Policy guidance

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Efficiency cost of advantageous-selection
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Submitted   Apr 21, 2022
Published   Jun 21, 2022
Issue    Vol 3 No 2 (2022)
DOI   10.25082/FMB.2022.02.002

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Akim M. Rahman corresponding author
[1] Policy Research Project, The Ohio State University, OH 43210, USA; [2] School of Business, Canadian University of Bangladesh, Dhaka 1212, Bangladesh
Saadi Islam
Public Relations, American International University-Bangladesh (AIUB), Dhaka 1229, Bangladesh

Abstract

In today’s e-banking, customers compete for comparative time-saving-options. Banks compete for maximizing profits. But many factors are unpredictable. These are perceived risks factors (PR) that undermines growth trends of e-banking in economy country-wise such as Russia. Bank-deposits, bank-accounts are covered by Deposit Insurance System (DIS) in Russian-economy. However, PR-factors are not covered. It causes abuses. Addressing the dilemma, application of Akim’s model – Voluntary Insurance (VI) as a product can be instrumental attracting more individuals using e-banking. Welfare Analyses are used as guidance for ensuring efficiency-cost or competitive pricing of the VI so that it becomes appealing to both customers and Banks. When bank is an insurance-provider, under asymmetric-information, existence of adverse-selection-group is detected where estimated welfare-cost associated with inefficient pricing created by adverse-selection is small. However, advantageous-selection-group in market results opposite. The findings can be helpful in policy-design ensuring risk-free digital-banking, which can attract policy-practitioners in Russia. Using customers-opinions can facilitate empirical studies.  

Keywords
e-banking, perceived risk, digital banking, voluntary insurance, adverse selection, advantageous selection

Article Details

How to Cite
Rahman, A. M., & Islam, S. (2022). Ensuring risk-free e-banking services in Russian-economy: Policy guidance. Frontiers in Management and Business, 3(2), 207-218. https://doi.org/10.25082/FMB.2022.02.002
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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

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