ADVANCED INTERNATIONAL JOURNAL OF BANKING, ACCOUNTING AND FINANCE (AIJBAF)

THE IMPACT OF FINANCIAL LITERACY ON ROBO-ADVISOR ADOPTION DURING ECONOMIC CRISIS: EVIDENCE FROM MALAYSIA

Najihah Abd Razak — 2026-09-09

Despite the potential benefits of robo-advisors, their adoption in Malaysia lags other East Asian developing economies, particularly during the recent economic crisis. The connection between the dimensions of financial literacy and the use of robo-advisors has not been adequately studied in the context of AI-assisted services in the past. This gap highlights the need to explore underlying behavioral and perceptual factors influencing the adoption of robo-advisors. This study builds upon the Technology Acceptance Model (TAM) by adding the financial literacy dimensions as external antecedents of perceived usefulness and behavioural intention to adopt robo-advisors. This addition expands the traditional TAM by showing that the adoption of robo-advisors is not only influenced by the perceptions of the users towards the technology itself, but also by their financial capabilities and orientations. A survey questionnaire was used to collect data on 380 Malaysian retail investors, which was analyzed by Partial Least Squares Structural Equation Modeling (PLS-SEM). Financial knowledge (β=0.613, p<0.05) and financial attitude (β=0.292, p<0.05) were found to have significant positive effects on perceived usefulness, and perceived usefulness exhibited a significant positive effect on intention to use (β=0.671, p<0.05), confirming its central role as a determinant of behavioral intention in this model. The model was observed to have a moderate predictive ability of behavioral intention to use by 53.2%. The results add to the existing literature on the adoption of financial technologies in emerging markets and have a number of practical implications. The providers must make conscious efforts to demonstrate the practical worth of their services by case studies, live demonstrations and interactive simulations that display the performance of robo-advisors in volatile markets. To policymakers and regulators, the findings highlight the importance of focusing on how individuals can use their skills with technology to deal with risk and improve financial decision-making in crisis situations.

SUSTAINING THE TAKAFUL INDUSTRY IN MALAYSIA: CRITICAL FACTORS AND STRATEGIES

Muhammad Zarunnaim Wahab — 2026-09-09

This paper aims to outline the future direction of Malaysia's takaful industry by highlighting several crucial aspects that takaful operators should focus on to ensure long-term sustainability. To accurately address the research objectives, a qualitative research methodology was employed. Primary data was collected through in-depth interviews with four informants who possessed expertise in various fields related to takaful. The analysis identified six critical areas that require attention for the sustenance of the Malaysian takaful industry: increasing the number of retakaful companies, introducing Sharia parameters, establishing a clear insolvency framework, ensuring transparency in the legal and operational framework, enhancing the knowledge and trustworthiness of agents, and conducting comprehensive research. This study has several limitations. Firstly, the focus on the perspectives of takaful operators (TOs) in Malaysia may limit the generalizability of the findings to TOs in other countries. Secondly, the small number of informants interviewed may not fully capture the diversity of opinions and experiences in the industry. Future research could address these limitations by expanding the scope to include multiple countries and increasing the sample size of informants. The findings provide valuable insights for takaful operators, guiding them in developing future business targets and directions. These results are significant for the industry, offering strategies to increase market share and deliver better quality products and services to customers.

MONETARY DEPTH AND ECONOMIC ACTIVITY AS DRIVERS OF PRIVATE CREDIT IN UGANDA

David Namanya — 2026-09-09

The main objective of this study was to examine the short run relationship between monetary depth, economic activity and annual changes in private sector bank credit in Uganda from 1994 to 2025, with particular emphasis on changes in broad money, real gross domestic product growth, inflation and lagged movements in private sector credit. To achieve this objective, annual data were obtained from the World Development Indicators and analysed using an ordinary least squares regression model with Newey West heteroscedasticity and autocorrelation consistent standard errors, while private sector credit and broad money were measured as annual changes in their respective ratios to gross domestic product. The results indicated that the model explained 81.4 per cent of the variation in annual changes in private sector credit; furthermore, changes in broad money and real gross domestic product growth had positive and statistically significant relationships with private sector credit. Although inflation had a positive relationship and the lagged change in private sector credit had a negative relationship, neither variable was statistically significant. Overall, the findings demonstrate that Uganda’s private sector credit dynamics are influenced by both banking system liquidity and prevailing economic activity; however, the less than proportional response of credit to broad money suggests that liquidity alone is insufficient to stimulate lending. The study recommends strengthening credit information systems, movable collateral registration, transparent loan pricing, financial sector competition and risk-based lending technologies, while recognising that the reported relationships represent short run associations rather than definitive causal effects.

COMPARATIVE ANALYSIS OF ARTIFICIAL INTELLIGENCE METHODS AND TRADITIONAL CREDIT RISK MODELS: AN EXPLORATORY QUALITATIVE REVIEW

Sadia Asif — 2026-09-21

Artificial intelligence (AI) and machine learning (ML) methods are revolutionizing the credit risk modelling. Traditional statistical methods which have been around for a long time are replaced with AI-based models. Although AI models provide superior predictive performance, their adoption in regulated financial sector is seen with caution. Financial sector regulatory requirements regarding interpretability, stability, fairness, and governance of credit risk models are one of the big challenges to AI & ML adoption. This study is based on an exploratory qualitative review to perform a comparative analysis of AI models and traditional credit risk models. This study examines relevant academic literature, publications, and industry reports. Five key points have been identified as a result of this study: (1) AI models are better than traditional models in terms of performance; (2) explainability and auditability is still the biggest challenge with AI adoption; (3) traditional models are more reliable yet they may not be efficient; (4) regulatory requirements impact model selection; and (5) hybrid modelling approaches are a promising middle ground. The article suggests a multidimensional theoretical framework for assessing credit risk models and emphasizes prospective research avenues in hybrid modelling, fairness-aware AI, and real-time risk monitoring.

PRIVATE SECTOR BANK CREDIT, FINANCIAL DEEPENING AND ECONOMIC GROWTH IN UGANDA: AUTOREGRESSIVE DISTRIBUTED LAG

David Namanya — 2026-09-21

This study evaluated the short run relationships among private sector bank credit, monetary depth, inflation and real output in Uganda from 1994 to 2025 and tested whether the variables shared a stable long run relationship. Annual data from the World Development Indicators were analysed using descriptive statistics, Augmented Dickey–Fuller (ADF) unit root tests and autoregressive distributed lag (ARDL) bounds testing. The Akaike information criterion selected an ARDL model with lag order (2,2,2,2). The bounds test F statistic of 1.684 was below the 5 per cent lower and upper critical values of 4.01 and 5.07, so no stable long run cointegrating relationship was established. In the short run, private sector credit was positively associated with real output in the current year (β = 0.0180, p = 0.005) and after one year (β = 0.0140, p = 0.044). In these results, β denotes the estimated regression coefficient and p denotes the probability value used to assess statistical significance. Broad money had negative conditional associations in the current year (β = −0.0090, p = 0.024) and after one year (β = −0.0075, p = 0.035). Current inflation was insignificant (β = −0.0010, p = 0.458), while lagged inflation was negative and significant (β = −0.0019, p =0.045). The findings indicate that the relationship between finance and output depends not only on monetary depth but also on the extent to which banks channel funds to private borrowers. Uganda should thus strengthen credit information, collateral systems and access to affordable long-term finance, while directing greater attention to productive sector lending.

FINANCIAL INCLUSION AND BANK EFFICIENCY IN THE ASEAN 5+1 REGION: ACCESS, USAGE AND ECONOMIC PARTICIPATION

Nabilah Abdul Shukur — 2026-09-30

Financial inclusion can broaden economic participation, but different access and usage channels may affect bank efficiency in different ways. This study examines the relationship between financial inclusion and bank efficiency across 200 commercial banks in six ASEAN economies: Indonesia, Malaysia, Singapore, Thailand, the Philippines, and Vietnam over the period 2013-2021 using an unbalanced panel of 1,500 usable bank-year observations. Bank efficiency is estimated using Data Envelopment Analysis (DEA) under constant and variable returns to scale, while the relationships between nine financial inclusion indicators and technical efficiency are examined using pooled ordinary least squares and bank fixed-effects models with robust standard errors. The findings reveal substantial cross-country differences in bank efficiency, with Thailand recording the highest average technical efficiency and the Philippines the lowest. Among the financial inclusion indicators, ATMs per 100,000 adults, credit cards, debit cards, and outstanding loans are positively associated with bank efficiency, whereas geographical ATM density, branch density, bank accounts, and outstanding deposits show negative associations. These results indicate that financial inclusion does not affect bank efficiency uniformly and that the operational effects depend on the specific channel through which access and usage are expanded. By analysing individual indicators rather than a composite financial inclusion index, this study provides more detailed evidence on how different dimensions of financial inclusion are associated with bank efficiency across heterogeneous ASEAN banking systems during the pre-pandemic and initial COVID-19 period.

TOO STRICT, TOO WEAK, OR JUST RIGHT? MINIMUM-WAGE REGULATION AND THE FINANCE–EMPLOYMENT–ECONOMIC PERFORMANCE NEXUS IN DEVELOPING ECONOMIES

Nurza Mohamed Yusoff — 2026-09-30

This study examines whether the association between financial development, employment and economic performance varies across minimum-wage regulatory regimes in developing economies. It uses an unbalanced panel of 96 countries from 2000 to 2022. The dependent variable is the natural logarithm of real gross domestic product in constant 2015 US dollars; therefore, it measures the real output level rather than the annual GDP growth rate. Financial development is represented by domestic credit to the private sector and broad money, both as percentages of GDP, while employment is measured by the total labour-force participation rate. The analysis combines dynamic System Generalised Method of Moments estimation with Hansen-type panel threshold estimation. The reported estimates show positive, statistically significant interactions between employment and both financial-development proxies. Two significant minimum-wage thresholds are identified for each proxy: 3.617 and 5.133 for the domestic-credit model, and 5.133 and 8.447 for the broad-money model. The intermediate regime contains the most consistently significant positive conditional association. However, because formal equality tests between regime coefficients are not available in the supplied results, the estimates do not establish that its coefficient is statistically larger than every other regime. The threshold pattern remains qualitatively stable under alternative bootstrap and trimming choices and after four outlier countries are excluded. The results indicate institutional contingency rather than a universal optimum and should be interpreted as associations, not causal effects. They suggest that minimum-wage policy, access to finance, productivity support and enforcement capacity should be considered jointly, while country-specific causal research is needed before prescribing regulatory targets.

CORPORATE GOVERNANCE, OWNERSHIP STRUCTURE AND ESG PERFORMANCE AMONG MALAYSIAN LISTED FIRMS: THE MODERATING ROLE OF FAMILY OWNERSHIP

Hing Tai Tan — 2026-09-30

The study investigates the relationship between corporate governance, ownership structure, and Environmental, Social, and Governance (ESG) performance in Malaysia's capital market, a market that is mainly dominated by family-owned firms. In this setting, concentrated ownership creates agency dynamics that differ from the dispersed-ownership archetype that forms the basis of classical Agency Theory. Prior Malaysian ESG research has paid limited attention to the moderating role of family ownership in board–ESG relationships and to the patterns of governance–ESG associations across environmentally sensitive (ESI) and non-environmentally sensitive (Non-ESI) industries. Based on both Agency and Institutional Theory, the study examines a balanced panel of 377 Main Market-listed firms (1,131 firm-year observations) from 2022 to 2024, with ESG performance assessed using Refinitiv ratings. Board independence and gender diversity are positively associated with ESG performance. Governmental ownership is positively associated with ESG performance in the full sample. The ESI/Non-ESI analysis shows different patterns in the estimated associations, but coefficient differences were not formally tested. Family ownership does not significantly moderate the four board–ESG relationships. Board size, legal expertise, institutional ownership, and foreign ownership are not significantly associated with ESG performance in the full sample. The results offer context-specific evidence that is relevant to both Agency Theory and Institutional Theory, and they indicate that industry context may be important when it comes to the relationship between ownership structure and ESG performance. The findings confirm the importance of board independence and gender diversity. They also suggest that sector-specific ESG guidance warrants consideration alongside broader governance requirements if corporate sustainability is to be strengthened in emerging markets.