Digitalisation and commercial bank performance: A test of heterogeneity from Chinese commercial banks

Abstract

Although digitalisation is a reality for companies and contributes to value creation, few studies have examined its impact on commercial bank performance. The objective of this paper is to analyse how banks' digitisation contributes to their performance. The study finds that digitisation has a non-linear dynamic relationship with commercial bank performance, being first inhibited and then facilitated. Moreover, the impact of digitisation on bank performance is heterogeneous, with small and medium-sized banks, those with a high share of non-interest income and those with a high customer concentration benefiting more from digitisation.