The Impact of ICT Patents on OECD Countries’ Banks Risk Indicators and Discussion on the Use of Robotic Communication and Smart Glasses in the Banking Sector

Abstract

The main objective of that research is to find out the influence of ICT patents on OECD banks’ riskindicators such as cost/income, return on assets, and return on equity between the period of 2005-2013. Otherobjectives are to research current applications of robotic technologies and smart glass usage in the bankingsector; and to discuss probable applications of robotic applications and smart glass usage in banking operations.Panel quantile regression analysis was implemented to unearth the impact of ICT patents on cost/income ratiosof OECD countries’ banks. In addition, Bayesian impulse response analysis was used to find the one standarddeviation positive shock of OECD countries’ banks ICT patents on the risk indicators of OECD countries’banks. Johansen panel cointegration analysis was implemented for the long term relationship betweencost/income and ICT patents. Since no data were available for robotic applications and smart glasses usage inthe banking sector, empirical analyses for robotic applications and smart glasses were not done. According tothe panel quantile regression analysis result, ICT patents had a significant negative influence on OECDcountries' banks cost/income ratio between 2005-2013. Bayesian impulse response analysis was implementedfor return on assets, return on equity, cost/income ratio. The positive impact was found for return on asset,return on equity, and the negative effect was found for the cost/income ratio. ICT patents positive innovationimpact has more influence on return on equity with respect to return on assets. Johansen panel cointegrationtest unearthed that there is a long-term relationship between ICT and cost/income ratios. It can be indicatedthat ICT patent production is useful for diminishing banks' costs. Moreover, robotic communication in bankscan enhance the banking sector cost efficiency. Robotic communication with other banks and inside the bankcan have an important influence on the development of the banking sector. Besides, it is possible that banksemployees can use smart glasses. Smart glasses can be used for fraud detection, such as diagnosis of fakechecks (Deloitte,2016). Currently, smart glass technology is immature; when the smart glass technologybecomes mature, bank employees can use that technology.