Examining the Impact of Revenue Diversification on Risk Management and Financial Returns in Electronic Banking

Abstract

Given the emergence of revenue diversification and the level of investment in various economic sectors, the liquidity entering the market has increased, ultimately leading to a rise in inflation rates. The proportion of independent board members can be considered one of the influential factors in establishing a balance between revenue diversification and the expansion of banking activities. The objective of this study is to examine the impact of revenue diversification on risk management and financial returns in electronic banking. This research is a library-based and analytical-causal study, utilizing panel data analysis. The financial information of ten banks listed on the Tehran Stock Exchange was analyzed over the period from 2016 to 2021 (60 bank-years). The findings indicate that revenue diversification significantly affects banks' risk levels and financial returns. Therefore, based on the research findings, an increase in the level and extent of revenue diversification can have significant implications for investors' decision-making.