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  • P-ISSN 1738-656X

KDI 정책연구. Vol. 25, No. 2, December 2003, pp. 89-135

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The Impact of Internet Banking on the Performance of the Korean Banking Industry : An Empirical Analysis

Hyeon-Wook Kim; Chang-Gyun Park

Author & Article History

Manuscript .


The paper tests the hypothesis that Internet banking reduces cost and ultimately enhances profitability for banks. Our analysis suggests that Internet banking does contribute to cost reduction but does not affect profitability. The implications are that the primary objective of Internet banking has been accomplished, but has not reached the stage in which the benefits overcome the burden of initial investment. The findings also offer the implication that Internet banking probably raises social welfare by passing on the benefit of cost reduction to customers rather than resulting in enhanced profits. In addition, we find that the banking customer's preference for face-to-face transactions may be very low in Korea, which supports the hypothesis that the cost in securing a customer base will be reduced significantly.


인터넷뱅킹, 수익성, 비용함수, 대면거래

JEL Code

G21, D20, L86

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