@phdthesis{Neisen2025, author = {Neisen, Martin}, title = {The impact of prudential regulation, digitalisation, and ESG on the performance of banks' business models in Europe}, doi = {10.26127/BTUOpen-7139}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:co1-opus4-71398}, school = {BTU Cottbus - Senftenberg}, year = {2025}, abstract = {Banks' business models and performance are heavily influenced by the trends of prudential regulation, digitalisation and Environmental, Social and Governance (ESG) factors. The aim of this research is to analyse how and to what extent these three major trends in the banking industry influence the performance of the business models of European banks. The main research question is whether these trends improve or deteriorate the performance of banks' business models. The research question is divided into three sub-research questions, each focusing on one of the major trends and its impact on banks' business models. The methodology of this research is based on the cumulative approach, which consists of presenting a set of five papers that have been published in reputable journals in the field of banking and finance. Each paper focuses on a specific aspect of the research question. As trends in the banking industry are not a measurable variable, they are defined for the purpose of answering the research question as constructs that can be made measurable using the variable risk-weighted assets. Each of the used papers cover a separate problem for the banking industry. The first paper analyses regulatory changes in the wake of the COVID pandemic. The second paper covers the impact of the output floor on the performance of banks' business models. The third paper shows how ESG Ratings and additional capital requirements influence the performance of banks' business models. The fourth paper covers the impact of AI in modelling credit risks, and finally, the impact of the EU implementation of Basel IV used. The research results of each paper are used to measure the change in the RWA. In the second step, the change of RWA is used as the independent variable that changes the business model performance. The analysed trends significantly influence the performance of business models but depends on the respective trend and individual case. This research offers a novel viewpoint in the banking literature and a valuable source for both practitioners and academic research. As the banking sector undergoes constant transformation, the insights obtained here emphasise the importance of adeptly managing the interplay of these trends to optimise business model performance. Other researchers can leverage this work as a catalyst for further research into the dynamic interplay between prudential regulation, digitalisation, ESG considerations and bank business model performance. Additionally, the linear association detected between these constructs and bank business model performance as measured by RAROC creates possibilities for quantitative research. This research stimulates further scholarly inquiry on this topic by highlighting the significance of these trends in determining the banking sector's future.}, subject = {Bank business models; Prudential regulation; Digitalisation; ESG risks; AI; Bankenregulierung; Digitalisierung; ESG; Gesch{\"a}ftsmodelle; K{\"u}nstliche Intelligenz; Bank; Regulierung; Digitalisierung; K{\"u}nstliche Intelligenz; Environmental, Social and Governance}, language = {en} }