THE IMPACT OF ICT CAPABILITY ON THE PROFITABILITY OF VIETNAMESE COMMERCIAL BANKS

Abstract

This study analyzes the impact of information and communication technology (ICT) capability on the profitability of Vietnamese commercial banks in the period 2006-2022. In this study, information and communication technology capability is measured by the composite ICT index and three ICT index components including technical infrastructure, human resource infrastructure and ICT application. Using the panel data regression with fixed effect model, the study found a positive impact of both the composite ICT index and component indexes on the profitability of banks. This research result implies that investment in ICT is necessary for commercial banks in Vietnam in the context of the current digital industrial revolution. This is also the basis for bank managers and policy makers to develop appropriate development strategies to achieve the goal of national digitalization.