Commerce and Management
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Item Banking Sector Development and Economic Growth in Sri Lanka: An Econometric Analysis(Department of Finance, University of Kelaniya., 2022) Wijesinghe, M. D. J. W.; Dulanjani, P.Purpose: This study aims to explore the role of the banking sector in elevating the economic growth of Sri Lanka by identifying the short-run and long-run relationship between banking sector development and economic growth in Sri Lanka. Design/Methodology/Approach: This study uses annual data for the period 1960 to 2019 from World Bank's Global Financial Development Database and World Development Indicators. Odedokun's model, which assumes the causation between financial development to economic growth, is employed using the bound test within the ARDL framework. Findings: The estimated long-term parameter of the banking industry development indicator was found to be positively affected economic growth by supporting supply-led growth model. The estimations of the Error Correction Model provide a broad picture of the short-term relationship, and the results are highly consistent with the results of the long-term model. Granger Causality test found that the banking sector development granger cause to the GDP indicating a unilateral relationship. Originality: This study differs from the existing studies, which focus on the neoclassical one-sector aggregate production model. Financial development is input along with other real sector variables to identify the short-run and long-run relationship with the help of a newly developed econometric approach.Item The Impact of Environmental, Social and Governance (ESG) Factors on Financial Performance - Evidence from Licensed Banks in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Dilhani, G. H. M. S.; Dissanayake, D. M. U. H.Introduction: In this context, the integration of Environmental, Social, and Governance (ESG) factors has emerged as one of the critical determinants of financial performance in banking, especially in emerging markets such as Sri Lanka. The study will try to establish how ESG practices have influenced the financial performance of licensed banks in Sri Lanka, focusing on Return on Assets (ROA) and Return on Equity (ROE). Methodology: This study collected data from 10 licensed banks in Sri Lanka over a sample period of fifteen years, from 2009 to 2023. Using a quantitative approach, this study collected secondary data from the annual and sustainability reports of the selected banks. Environmental, social, and governance (ESG) factors were used as the independent variables of the banks selected. Both Return on Equity and Return on Assets were used to measure the financial performance of the selected banks. Further, bank size, leverage ratio, and dividend yield were used as the control variables. A series of fixed-effects panel regression models was used in this study to analyze the data. Findings: The results of the study revealed that there is a positive and significant impact between Environmental, Social, and Governance (ESG) factors and ROE and ROA, whereas all the other hypotheses were accepted. In conclusion, this study revealed that the ESG factors significantly impact the financial performance of the licensed banks in Sri Lanka. Conclusion: The study concludes that ESG integration is no longer solely a regulatory or ethical requirement but also a strategic imperative for financial performance and competitive advantage. It is encouraged that the licensed banks in Sri Lanka adopt comprehensive ESG frameworks with a view to ensuring sustainability and profitability.Item Exploring Barriers and Opportunities Faced by Banking Sector When Adopting Fin-Tech Innovations(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Swarnathilake, P. G. O. K.; Abeysekera, R.Introduction: FinTech innovations have transformed the banking industry by increasing efficiency in services and improving customer satisfaction, while reaching a greater number of the unbanked population. However, in Sri Lanka, the potential benefits of FinTech are curtailed by regulatory constraints, cybersecurity concerns, and resistance to change. This paper analyzes the dynamics of these challenges and opportunities, focusing on actionable solutions for successful FinTech integration in the Sri Lankan banking sector. Methodology: This qualitative research has been designed under a social constructivist framework; the data collection method adopted in this study is semi-structured interviews with nine representatives of different banks. The respondents have been chosen using purposive sampling in order to capture the diversity in private, government, and foreign banks. Thematic analysis was employed to identify patterns and themes pertaining to FinTech adoption barriers and opportunities. Findings: Opportunities: 1.Efficiency and Automation: Reduction in operational costs; smoother processes. 2.Customer-Centric Innovation: Personalized finance services; AI-driven support. 3.Financial Inclusion: Increasing access to the rural and under-served sections of society. 4.Improving Payment Systems: Speedier and more secure digital transactions. Challenges: 1.Regulatory Barriers: Vagueness and outdated frameworks. 2.Cybersecurity Risks: Growing vulnerability with digitization. 3.Resistance to Change: From both employees and customers. 4.Infrastructure Gaps: Inadequate connectivity in rural areas. Conclusion: This study brings to light that while FinTech offers transformative opportunities for Sri Lankan banks, overcoming significant barriers is essential for successful integration. Investments in infrastructure, digital literacy programs, and regulatory reform are vital to leveraging FinTech's potential for efficiency, inclusion, and customer satisfaction.