The level of digital transformation affecting the competitiveness of banks

Abstract

The article examines the competitiveness of Ukrainian banks influenced by economy digitalization, the dynamic spread of electronic payments and e-commerce, as well as innovative technologies aimed at providing digital services. When shifting to an Online Platform business model, a bank can expand its range of banking products, attract more customers, thereby forming a competition policy and gaining competitive advantages. The paper aims to assess the digitalization level affecting the general competitiveness of banks and its components based on Ukrainian banks. For this purpose, the following methods were used: standardized input statistical indicators, comparison and ranking, a cluster analysis, and a regression and correlation analysis. The cluster analysis confirmed the current role of digitalization as a competition driver that determines the competitive advantages of banks and creates additional opportunities to expand the customer base and the range of services. The correlation and regression dependence of the competitive position identified by the activity indicators of certain banks on the level of competitive digitalization confirmed a close direct impact on the competitive position of personal deposits arising from the development of digital banking technology; the pre-tax income, profiles of assets and personal loans, and corporate deposits are subject to a significant direct impact, while the weakest direct impact determines corporate loans. The foregoing substantiates the feasibility of large-scale introduction of innovative digital technologies by banks to maintain competitive positions in the banking sector of the economy. Applying the proposed approach based on certain regression equations, managers of Ukrainian banks will be able to assess the efficiency and make appropriate decisions concerning investing in digital tools and services.

Digitalization and bank profitability: evidence from an emerging country

“…Rajan (1992), B atiz-Lazo andWoldesenbet (2006), Acharya et al (2008), Zhao et al (2019) also found that digitalization helps increase bank efficiency and thus, improves bank's competitive positions. Based on these reasonings, a positive relationship between bank digitalization and profitability has been found in previous studies (see Carb o-Valverde et al (2020), Kriebel and Debener (2020), Malik et al (2020), Dadoukis et al (2021), Kolodiziev et al (2021), Do et al (2022)).…”

Measuring Customer Trust Through Digital Transformation of Banking as a Competitive Advantage

“…Therefore, the results of this study succeeded in proving that banking digital transformationinfluence on competitive advantage and become one of the brilliant strategies in banking marketing. According to Kolodiziev et al (2021), currently, the digitalization process in banking is a way to expand the range of banking products and help shape competition policies and become a competitive advantage. According to Hadi & Hmood (2020) that the implementation of a digital transformation strategy by banks will provide many advantages.…”

“…The digital transformation process is considered as the use of digital technology to improve business models and increase their efficiency (Galazova & Magomaeva, 2019). Thus, digital transformation is represented as a factor that is applied to assess the competitiveness capacity of banks that are scientifically found (Kolodiziev, Krupka, Shulga, Kulchytskyy & Lozynska, 2021). Currently, the need for digital transformation in the banking industry is experiencing rapid progress .…”

Marketing research in the context of trust in the public sector: A case of the digital environment

“…Different theories exist in the literature regarding the positive and negative consequences of digital transformation in society (Martins et Kwilinski et al, 2020). Some of these studies were directed at investigating the differential impact of digitalization on banking products and services from a customer-oriented perspective (Prokopenko et al, 2022), while others discussed digital shifts in the financial industry in general (Kolodiziev et al, 2021;Volosovych et al, 2021;Kolodiziev et al, 2022). At the other end of the spectrum of academic research, there is a discussion about the link between the digital divide and the level of economic development of regions (Deineko et al, 2022;Melnyk et al, 2022) or country macroeconomic stability (Petroye et al, 2020;Tiutiunyk et al, 2021;Wang et al, 2022).…”