Research into Relationship Between Banks' Probability of Default and Intensity of User Search Queries

The study examines the influence of the intensity of users` search queries with the name of the bank in Google system on the probability of default of Russian banks, as the statistics of search queries reflect the potential number of bank customers, therefore, the demand for banking services. For this purpose, 4 logistic models for the probability of banking default and 2 linear regression models for bank profit before tax were built on quarterly data from 2013 to 2018 for Russian banks. The models used financial CAMEL indicators, as well as non-financial indicators: macroeconomic, regional and intensity of user search queries, which were taken with a lag of 1 and 2 quarters. As a result, a statistically significant positive relationship was found between the intensity of user queries and the probability of default of Russian banks with a lag of 1 and 2 quarters, which can be explained by the effect on bank profits, which was empirically confirmed by a positive statistically significant relationship between the intensity of search queries and profit of banks with lag of 1 and 2 quarters.