Digital transformation of commercial banks in China: Measurement, progress and impact

Abstract

Nowadays, digital transformation has become an urgent strategic task for traditional commercial banks. Due to the lack of measurement of banks’ digital transformation, whether digital transformation could enhance the competitiveness of banks is still inconclusive. In this paper, we construct an index system to measure digital transformation of banks from three dimensions: strategy transformation, business transformation and management transformation. Using data from Chinese commercial banks, this paper measures the progress of digital transformation of banks in China. The empirical results show that digital transformation can improve bank performance, reduce the negative impact of new technology entrants, and promote the exit of offline channels.