The Effect of Digital Transformation on Bank Performance

34 Pages Posted: 10 Oct 2019 Last revised: 20 Apr 2021

See all articles by Johannes Kriebel

Johannes Kriebel

University of Muenster

Jörn Debener

University of Muenster

Date Written: September 30, 2019

Abstract

This paper studies the link between digital transformation and bank performance. We find that digital transformation activities take up to five years to increase efficiency. Furthermore, we find that difficulties with digital transformation are informative of persistent decreases in efficiency and also profitability. In addition, we further show that problems related to IT infrastructure are a central obstacle to bank performance, which fits well with anecdotal evidence of so-called 'legacy IT'. This highlights the importance of careful digital transformation for sustainable bank stability.

Keywords: Digital transformation, banking, firm performance, textual analysis

JEL Classification: G21, O33

Suggested Citation

Kriebel, Johannes and Debener, Jörn, The Effect of Digital Transformation on Bank Performance (September 30, 2019). Available at SSRN: https://ssrn.com/abstract=3461594 or http://dx.doi.org/10.2139/ssrn.3461594

Johannes Kriebel (Contact Author)

University of Muenster ( email )

Universitätsstraße 14-16
Münster, D-48143
Germany

Jörn Debener

University of Muenster ( email )

Universitätsstr. 14-16
Münster, D-48143
Germany

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