The impact of digital transformation on business performance of commercial banks: empirical evidence from 42 a-share listed banks in China

Amid the wave of financial technology, digital transformation has become an inevitable path for the development of commercial banks. However, its impact on business performance remains debated. Using panel data for 42 A-share listed banks in China from 2017 to 2021, this study empirically estimates the net effect of digital transformation. The results show that digital transformation significantly enhances banks overall performance, with a more pronounced promotive effect for regional banks. The main conclusions remain valid after a battery of robustness checks. Based on these findings, we offer policy recommendations for differentiated digital-transformation pathways for commercial banks along three dimensions: cost reduction and efficiency enhancement, revenue diversification, and risk-control optimization.