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Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
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doi
open access

Published: 07 November 2024

Assessing the Financial Performance of Digital Banks: A Comparative Analysis

Aminah, Sudarso Kaderi Wiryono, Oktofa Yudha Sudrajad

Institut Teknologi Bandung, Indonesia

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

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doi

10.31014/aior.1992.07.04.623

Pages: 105-110

Keywords: Digital Transformation, Digital Bank, Financial Performance, Productivity Paradox

Abstract

The digital shift drives the banking sector to evolve by creating digital business models. The emergence of digital business models in banking prompts an examination of the financial performance of digital banks relative to traditional banks, considering the substantial investment required and the complexity of the transition process. This study aims to assess the financial performance of two categories of banks: those that have undergone complete digital transformation, or neo-banks, and those that continue to employ conventional business practices in Indonesia or traditional banks. The findings indicate that neo-banks excelled in generating interest income, while traditional banks had greater efficiency, liquidity, and profitability. These findings theoretically explain the productivity paradox theory and offer insights for bank management in formulating policies regarding digital business models.

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