The Digitalization Transformation of Commercial Banks and Its Impact on Sustainable Efficiency Improvements through Investment in Science and Technology

Abstract

The COVID-19 epidemic has accelerated the digital economy’s pervasiveness throughout the Chinese economy, leading to a sharp rise in demand for “contactless” services in the financial industry. We examine the digital transformation of the Chinese banking industry using the DEA–Malmquist index method, supplemented by a distance function and time to compare the dynamic changes of productivity. Our paper then conducts an empirical study on the digital transformation of Chinese commercial banks based on their improvements in efficiency. We analyze banks with superior efficiency in science and technology investment and evaluate their digital maturity and digital transformation experience. Results show that digitalization investment has contributed to substantial production efficiency improvement for commercial banks; however, heterogeneity exists across banks. We further advocate a path for banks’ digital transformation based on theoretical research and empirical digital transformation experience in this area.

Digitainability and Financial Performance: Evidence from the Serbian Banking Sector

“…The research also reports that digitalization can increase productivity and decrease costs [5], thus leading to better performance. A study focusing on single countries, such as Nigeria, shows that digitalization, if adequately implemented, has a positive impact on the performance of commercial banks [6], whereas a study in China showed that investment in digitalization contributes to sustainable production improvements in commercial banks [7]. On the other hand, the research reports that digitalization does not come free of operational risks [8] and that the digitization of banking poses a threat to several areas, including security [9].…”

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A Systematic Review on Banking Digital Transformation

“…The Delphi model will transform the results of the expert interview into a quantitative model. Among those who use this method are (Do et al, 2022;Reitz et al, 2019;Zuo & Strauss, 2021).…”