Assessing the Impact of Digital Transformation on the Performance of Commercial Banks in Vietnam

Abstract

This study aims to empirically assess the impact of digital transformation (DT) on the performance of commercial banks in Vietnam. The research employs secondary panel data collected and compiled from audited financial statements and annual reports of 20 listed commercial banks in Vietnam. The dataset covers a 10-year period, from 2015 to 2024. Based on this dataset, the study applies the Fixed Effects Model (FEM) to quantify the relationships among variables. Bank performance is measured using two key indicators: Return on Assets (ROA) and Cost-to-Income Ratio (CIR), while digital transformation is represented by the proportion of investment in technology. The analysis reveals that DT exerts a positive and statistically significant effect on ROA, while simultaneously having a negative and statistically significant effect on CIR. These findings confirm that greater investment in technology not only enhances the profitability of Vietnamese banks but also optimizes their operational efficiency. From these results, several important implications emerge. For bank managers, it is crucial to formulate long-term DT strategies to strengthen competitiveness. For regulators, the improvement of the legal framework plays an essential role in fostering the sustainable development of the banking sector in the digital era.