The Impact of Digital Banking on Banking Competition: A Case Study of a Sample of Iraqi Commercial Banks

Abstract

This study aims to measure and analyze the extent of digital banking's impact on the banking competition of three commercial banks in Iraq for the period of 2016-2022. These banks are the Bank of Baghdad, the Iraqi Middle East Bank, and the National Bank of Iraq. The current study employed a deductive approach and used the Panel ARDL methodology, which shows the effect of independent variables in the short run and long run on the dependent variable. The study concluded that there is a statistically significant relationship between the independent variables and the dependent variable. The estimation results revealed that the coefficients of two determinants of digital banking, which are the independent variables affecting banking competition, are consistent with economic theory, while one independent variable contradicts economic theory. It was found that the Bank of Baghdad is the best in reflecting its use of digital banking in its banking competition, followed by the National Bank of Iraq in second place, closely behind the Bank of Baghdad, and the Iraqi Middle East Bank came in third and last place.