Data Analysis of Deposits Mobilization, Lending Behavior and Investments in the Saudi Banking Sector over Intelligent Model

Abstract

The process of obtaining funds for business activities is a key function of banks.This fund could be generated from various sources, on top of them is the deposit mobilization activity. Once the deposits volume increases, it will definitely increase along with it the chances of more disbursed loans leading ultimately to the creation of more investment opportunities for both lenders and borrowers. Hence, the study aims to investigate the relationship between mobilized deposits, banks investments, and Customer’s Loans & advances in the Saudi Banking Sector. The study covers the period from 2009 to 2018, post to the global financial crises that took place in 2007-2008. The relationship among the study variables is examined and tested by two different models; i.e., the traditional (statistical) model, and the intelligent ones. The statistical one applies different statistical tests such as Correlation, Regression, ANOVA, and others; where the intelligent one employs an intelligent model for testing the relationships among the variables of the study. The intelligent model uses the Artificial Neural Network Practical Swarm Optimization (ANNPSO) model for the purpose of the study. In this method, the Standard Indicators Metrics such as Mean Squared Error (MSE), Root Mean Squared Error (RMSE), and Mean Absolute Error (MAE) areal used to test the performance of the ANNPSO model. According to the traditional statistical model results, it was revealed that a positive and significant relationship was established not only between banks investments and the mobilized deposits with a regression degree of 79.3%, but also between mobilized deposits and customer’s loans & advances with a regression rate of 62.2%.The results further indicated a significant positive relationship between banks investments and customers loans & advances with a correlation result of 65.1%. Concerning the results of the intelligent model, the study demonstrated a strong positive relationship between banks investments, customer’s loans & advances, and mobilized deposits with 93.9%. The study’s findings further showed positive relationship between banks investments and mobilized deposits of 80.7%, and a positive connection between mobilized deposits and loans and advances of 93.7%.It is thus concluded that there is a very strong relationship between the variables of the study and the results, which is disclosed best with the help of the intelligent model; i.e.,ANNPSO.The study, therefore, recommends the continuation of mobilization of funds and focusing more on loans disbursing to assure best utilization of deposits received.