Empirical Analysis of the Impact of Remote Customer Acquisition on the Performance of the Turkish Banking Sector

This study examines the impact of remote customer acquisition on bank profitability and credit risk in Turkey, using monthly data from May 2021 to February 2025. Applying Robust Least Squares estimation, the analysis investigates how fully digital and hybrid onboarding channels affect Return on Assets (ROA), Return on Equity (ROE), and Non-Performing Loan (NPL) ratios. Findings indicate that the number of fully remote applications is positively associated with higher NPL ratios, suggesting increased credit risk due to limited human oversight. Conversely, applications finalized through representatives or couriers show a significant negative relationship with NPLs, implying improved credit quality via human verification. Remote applications have positive but statistically insignificant effects on ROA and ROE. In contrast, customers finalized in physical branches positively and significantly impact profitability measures at the 1% significance level. Additionally, interest income relative to average assets strongly supports profitability, while higher NPL and loan-to-deposit ratios negatively affect it. A strong equity ratio also contributes positively to bank performance. These results emphasize the importance of integrating digital tools with traditional banking and human oversight to achieve sustainable profitability and effective risk management during digital transformation.