A Gold Mine: The Importance of Information and Communication Technology (ICT) on Bank Liquidity in Asia and the Pacific

• Published in: ASEAN Journal on Science and Technology for Development
• Main Author: Udin S.; Bujang I.; Chiuh N.N.
• Format: Article
• Language: English
• Published: University of Brunei Darussalam 2024
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85195059407&doi=10.61931%2f2224-9028.1567&partnerID=40&md5=9e1bc44fb8c2a4c3c15ab770a449b745

Financial systems are the entities in charge of promoting, growing, and enhancing economic growth and development. To be viable in the market, financial institutions must maintain enough liquid assets to meet any unforeseen demand from customers at any time needed. Currently, banks are pursuing cutting-edge technologies to survive and thrive in an ever-changing market environment. This paper aims to examine the relationship between information and communication technology (ICT), macroeconomics and bank liquidity risk in Asia and the Pacific. The research took place between 2012 and 2018 and the nations were chosen based on data availability; as a result, the sample included 24 Asian and Pacific countries. Stata 15 software was used to run the static panel data to evaluate the finding. The result was tested using the Hausman Specification test. The finding showed that mobile cellular and ATM have a positive relationship with liquid assets ratio. While the interest, fixed broadband, and secure internet server have a positive relationship with cash deposits ratio. The GDP and interest are inconsistent with the expected finding. The result highlighted the importance of secure internet servers in doing transactions which affect customers' perceptions specifically the increase in the cash deposits ratio. The increase in ATM has a positive impact on liquid assets ratio. The contribution of this paper suggests that the improvement in transaction security may increase payment transparency because every transaction is traceable, reducing the possibility of fraud and crime; and does not face as many flurries. The bank should adapt to the changing market environment by considering the latest technological resource that can help facilitate the transactions to improve the quality of bank liquidity risk. © 2024 University of Brunei Darussalam. All rights reserved.