Effects of Digital Transformation on Performance of Commercial Banks: Evidence from Vietnam

Abstract

The paper has analysed the effects of digital transformation on Vietnamese commercial bank performance. In spite of the high consensus around the world about the benefits of digital transformation, there has been a lack of quantitative research in Vietnam to provide evidence on the effects of digital transformation on performance of commercial banks. The article therefore aimed at contributing to filling this gap. Using balance sheet data of 19 Vietnamese commercial banks in the period 2012 - 2020 and estimating the regression model using the OLS, FEM, REM and FGLS methods, the results show that the digital transformation has a positive effect to the efficiency of Vietnamese commercial banks. In addition, control variables such as size of a bank's assets, outstanding credit and inflation all have a significant effect on the performance of commercial banks.