Impact of Digital Transformation and Risk-Adjusted Income Diversification on Human Resource Efficiency at Vietnamese Commercial Banks

Abstract

This study investigates the impact of digital transformation and risk-adjusted income diversification on human resource efficiency at 28 Vietnamese commercial banks during the period 2019–2023. Utilizing panel data and the fixed effects model (FEM), selected through the Hausman test to ensure model appropriateness, the findings reveal that digital transformation has a positive and statistically significant effect on human resource efficiency. Specifically, investment in digital technologies contributes to optimizing work processes, enhancing labor productivity, and improving human resource management capabilities. In contrast, the effect of income diversification on human resource efficiency remains ambiguous, largely depending on each bank's risk management capacity and strategic implementation. Based on these findings, the study recommends that banks continue to accelerate digital adoption while simultaneously developing effective risk management strategies to enhance workforce performance and maintain competitive advantage in an increasingly digitalized environment.