ecb.wp3092~84ac652507.en.pdf

Here are the key points summarized from the document:

Introduction

• The paper investigates the relationship between digitalization and deposit growth rates in European banks.
• It uses a unique dataset of 110 significant institutions (SIs) across the EU, with quarterly data on total deposits and a digitalization proxy based on app use.

Digitalization Proxy

• The paper constructs a digitalization proxy using Google Play reviews, with two approaches:
  1. A binary variable indicating whether an app exists for each bank.
  2. A continuous variable based on the number of reviews received by each bank's app.

Results

• The results show that digitalization has a positive and significant effect on deposit growth rates.
• The effect is amplified during times of financial stress, such as during the COVID-19 pandemic.

Robustness Checks

• Additional robustness checks include:
  1. Using a different digitalization proxy based on online banking penetration.
  2. Controlling for bank-specific characteristics and macroeconomic variables.

Conclusion

• The paper concludes that digitalization has a positive effect on deposit growth rates, particularly during times of financial stress.
• The results have implications for bank supervisors and policymakers seeking to promote financial stability and growth in the EU.

Key points:

1. Digitalization has a positive effect on deposit growth rates.
2. The effect is amplified during times of financial stress.
3. Online banking penetration is used as an alternative digitalization proxy.
4. Additional robustness checks are conducted to ensure the results are reliable.
5. The paper concludes that digitalization is important for promoting financial stability and growth in the EU.