Strengthening the Structure, Digital Technology, and Competitiveness of Financial Performance on Rural Commercial and Shariah Banks for Achieving Sustainable Development Goals

Objectives: This study investigates the impact of several bank health indicators, corporate governance, and the role of digital technology on the financial performance of rural commercial and Shariah banks. This study is important for strengthening corporate governance and the competitive financial performance of Rural Commercial and Shariah Bank in achieving Sustainable Development Goals (SDG). Theoretical framework: The research is grounded in agency theory, which applies to rural commercial and Shariah banks by explaining the relationship dynamics and agency problems between owners (principals) and managers or customers (agents). Methods: This analysis employs multiple linear regression statistical methods, utilizing purposive sampling of annual financial report data from rural commercial and shariah banks. Results and Discussion: The research results indicate that GCG and NPL variables have a significant impact on profitability, whereas other variables have no effect. The moderating role of GCG and financial technology innovation also indicates no significant effect on ROA. These indicate that collective banking efforts to strengthen internal structures through GCG implementation, technology adoption, risk management, and other financial performance measures have not been effective enough in maintaining profitability. Research Implications: The evidence will allow rural commercial and shariah banking management to improve fundamental issues in capitalizing on opportunities and managing risks through the expansion of rural bank business and activities. The regulatory body should strengthen supervision and implementation of established regulations and protect customer interests. Originality/Value: This research highlights the importance of the financial performance of rural commercial and shariah banks with fundamental improvements in corporate governance, risk management, digital technology adoption, and capitalizing on business opportunities to achieve sustainable development growth.