Abstract
This study aimed to explore the cross-section of digitalization and sustainability in banking and its effect on bank performance. The sample consisted of all of the banks (n = 25) operating in the Republic of Serbia from 2011 to 2020. The research results show that the banks focusing on digitalization and sustainability are profitable, even in the face of coronavirus disease 2019 (COVID-19). Furthermore, using the Pearson’s correlation, the study shows that the level of investment in digital transformation has a strong relationship with the net result. We advocate that digitainability in banking is an important factor in uncertain times and should be fostered and included in bank strategies in the post-COVID 19 world. To the best of our knowledge, this is the first study that provides insight into digitainability and bank performance.
Highlights
Digitainability and FinancialThe cross-section of digitalization and sustainability has been neglected by academic research, digitainability offers a great opportunity to capture the cross-fertilization effects of both digitalization and sustainability [1]
Clients being at the core of banking strategy more than ever has led to the introduction of fintech [21], resulting in some of the current trending topics for banks being fintech and coronavirus disease 2019 (COVID-19) [22]. It appears that the association between digitalization and sustainability in banking has not been extensively studied, especially not during the COVID-19 pandemic, which accelerated the pace of digitalization [7], and considering the limited findings from the already very limited literature, we focused on the cross-section of digitalization and sustainability and its effect on bank performance in a developing country in the Western Balkan region by capturing the first phase of the COVID-19 pandemic
Their integration process started on 30 June 2021, (3) Raiffeisen and Credit Agricole—their integration process started in the second half of 2021, and (4) Eurobank a.d. Beograd (Euro) and Direktna—their integration process started in the second half of 2021
Summary
Digitainability and FinancialThe cross-section of digitalization and sustainability (digitainability) has been neglected by academic research, digitainability offers a great opportunity to capture the cross-fertilization effects of both digitalization and sustainability [1]. The studies focusing on the link between digitalization and banking show that digitalization is of special importance to banking [3], as it is a continuous and unstoppable process [2,4]. The research reports that digitalization can increase productivity and decrease costs [5], leading to better performance. A study focusing on single countries, such as Nigeria, shows that digitalization, if adequately implemented, has a positive impact on the performance of commercial banks [6], whereas a study in China showed that investment in digitalization contributes to sustainable production improvements in commercial banks [7]. The link between digitalization and banking has been identified, the data on the effects of digitalization on financial performance in banking are still limited, especially in developing markets
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