Globalization has led to an increase in foreign banks’ penetration. It is argued that the presence of foreign banks may affect the banking sector of the host countries in several ways including their competition level. It is mentioned that the presence of the foreign banks could heightened the level of competition in the banking sector. Nonetheless, the impact of the foreign banks on competition could be influenced by the degree of information sharing in the banking industry. This study investigates the role of information sharing in moderating the impact of foreign bank penetration on host banking sector competition in selected developing countries. We employ panel data samples of 54 developing countries during the period from 1998 to 2016. The estimation is carried out using the two-step system of the Generalized Method of Moments (GMM) regression technique. This technique is adopted due to its robustness to all forms of endogeneity. The findings of this study show that the presence of information sharing could affect the relationship between foreign banks’ penetration and competition. They suggest that improvement in information sharing by a host country may help foreign banks to improve monitoring and reduce the moral hazard and adverse selection problem.

In 21 st Century business world, services are carried out in multifaceted, competitive and rationality manner that are characterized by evolving many factors, which are often unpredictable. On-the-go banking is a product in financial sector. However, it faces serious pitfalls being it riskiness. Bank customers compete for time-saving options. On contrary, PCBs compete for marginalizing its operating costs for enhancing its revenues. On strategic tactics, PCBs targets city customers in multi-facets including offering incentives for enhanced usages of on-the-go banking. Influencing customer’s intention, attitude and behavior in banking, PCBs also offers incentive under market system along with often informational asymmetry. However, it causes exploitation. In most cases customers don’t read terms & conditions of services. They don’t save contract-copy. These weaknesses cause abuses. Customer faces hidden charges, extra fees, account hacked. Addressing the issue, Voluntary Insurance Option is proposed where PCBs will introduce it as a product of bank-services. Transferring risk away from customer will benefit both PCBs and bank-customers. This product can attract new customers who were on the brink using digital banking but just felt it was too risky. This model can facilitate the parties involved for increasing usage of on-the-go banking-services while customers can maintain optimal utility of usages.