Article

 

FOR ENSURING RAPID-GROWTH RISK-FREE DIGITAL-BANKING IN GREEK ECONOMY: AN APPLICATION OF AKIM'S MODEL (p.13-32)

by

Akim M. RAHMAN, CANADIAN UNIVERSITY OF BANGLADESH

Saadi ISLAM, UNIVERSITY OF DHAKA, BANGLADESH

Keywords : On-the-Go banking, Digital-banking, Perceived-risk, Adverse and Advantageous selections in insurance market

JEL classification : B12, D61, D71, D78, D81, D83

Abstract

In 21st-Century business-mentality technology-driven-world, banking-services are carried-out in competitive manner that has resulted usage of digital-banking. Bank Laws in Greece contains multi-faucets provisions. Under bank-operation provisions, bank-deposits, bank-accounts are covered by Hellenic Deposit & Investment Guarantee Fund (TEKE). But bank-deposits are not insured. But in practice government intervenes to ensure that depositors do not suffer a loss. Despites rapid growth of digital-banking globally, no country has insurance in practice to cover digital-transaction. But it faces serious pitfalls being it riskiness. Customers don't read terms & conditions of services. These weaknesses cause abuses. Customer faces perceived-risk-factors. Application of Akim's model - Voluntary Insurance (VI), a new product in banking-services, can be impetus in meeting the challenges. Welfare Analyses are used as guidance for ensuring efficiency-cost of competitive pricing of insurance. Thus VI becomes appealing to parties-involved. In case of bank-service-provider, adverse selection in insurance market, welfare cost of inefficient pricing is quantitatively small and advantageous selection results the opposite.