V3I5P34

Impact of Digital Banking on Financial Performance in Banking Sector

Antra Mistry^1*, Dr. G. Madhumita²

Abstract

The study investigates the effects of digital banking adoption on the financial performance of a large public sector banking organization based in India, in particular its customer experience and cost efficiency results. Through analysis of 110 customer responses collected in relation to the following five aspects Digital Banking Adoption, Digital Infrastructure Investment, Digital Service Innovation, Digital Transaction Efficiency, and Cost Efficiency, the paper utilizes percentage analysis, chi-square testing, multiple regression analysis, reliability analysis, and correlation analysis. According to the obtained results, digital transaction efficiency has proved to be the strongest independent variable impacting cost efficiency, having demonstrated the highest beta coefficient (β = 0.582), as well as the highest chi-square value (χ² = 109.957, p = 0.000). The entire regression analysis proved to be quite effective because its R² value amounted to 0.838, meaning that the studied variables explain 83.8 per cent of variance in cost efficiency. The dominance of positive answers (53.1%) indicates that customers have a positive attitude towards the bank, although there were 24 per cent of respondents who remained neutral about digital adoption and cost.

Keywords:

Digital Banking, Financial Performance, Cost Efficiency, Transaction Efficiency, Service Innovation, Digital Transformation, Banking Sector