E-banking and risk management: evidence from the Cypriot public sector banks

E-banking has become one of the most powerful tools in the banking industry and so it has attracted the attention of many researchers and academics. The aim of this paper is twofold. Firstly, to explore the bankers' perception based on the advantages of electronic banking and the risks that are associated with electronic banking. Secondly, to explore banker's perception on the risk management principles of e-banking according to the 14 principles of Basel Committee in Cyprus. The main research instrument is a questionnaire. Multinomial regressions and other statistical tools are applied in this paper. Our findings suggest that most of the respondents, who are bankers in Cyprus, perceive e-banking as an advantage for reducing the risk of carrying cash, for the time saving and convenience. Surprisingly, the bankers do not consider that e-banking increases frauds and issues on data loss, and do not increase the chances of government access. Furthermore, our results indicate that the four major public banks in Cyprus identify risks and manage them according to the 14 principles of Basel Committee. Finally, a significant link between both the years of experience of banker and the position held in the banks; and the security control as one of the 14 principles of Basel Committee has been identified applying multinomial regression model. The results can strongly support the management team of each bank for the development of a more efficient strategy for the future of e-banking in Cyprus.