Journal of Financial and Quantitative Analysis Vol. 59 No. 6 2024
Stress Testing Banks’ Digital Capabilities: Evidence from the COVID-19 Pandemic
Abstract
Banks’ information technology (IT) capabilities affect their ability to serve customers during the COVID-19 pandemic, which generates an unexpected and unprecedented shock that shifts banking services from in-person to digital. Amid mobility restrictions, banks with better IT experience larger reductions in physical branch visits and larger increases in website traffic, implying a larger shift to digital banking. Stronger IT banks are able to originate more Paycheck Protection Program loans to small business borrowers, especially in areas with more severe COVID-19 outbreaks, higher internet use, and higher bank competition. Those banks also attract more deposit flows and receive better mobile customer reviews during the pandemic.
- DOI
- 10.1017/s0022109023000662
- Volume
- 59
- Issue
- 6
- Pages
- 2618-2646
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref