Digital transformation and banks’ financial performance: Evidence from Egypt

Abstract

The present study attempts to examine the impact of digital transformation on bank financial performance by taking a sample of 15 commercial bank in Egypt during the period from 2010 to 2020. The study consists of four main variables (Bank risk, Number of ATMS, Number of branches and Liquidity) Digital transformation is divided into two sub variables (Branches, ATMS). Result of Spearman correlation coefficient showed a weak and moderated direct relation between (Bank risk, Number of ATMS, Number of branches, Liquidity) and ROA. To test the study main hypothesis the research found that random linear regression is the most fitted model to determine the impact of (Bank risk, Number of ATMS, Number of branches, Liquidity) on bank performance (ROA). The main hypothesis There is a significant impact of digital transformation, bank risk and liquidity ratio on financial performance of banks. Will be accepted, as the digital transformation, bank risk and liquidity ratio showed a direct impact on financial performance (ROA), and the overall financial performance changes by 71.663% due to the variation of the four independent variables.