Digital Transformation and Financial Resilience in Indonesian Banking: A Comparative Pre–Post Analysis (Jurnal Ilmiah Manajemen Kesatuan)

Summary

• World Bank statistics reported 97.74 million unbanked adults in Indonesia in 2021.p.1
• Literature indicates that up to 70% of digital initiatives fail to achieve their intended performance targets.p.2
• The study sample evaluates 6 Indonesian commercial banks using quarterly financial observations spanning 2018 to Q1 2025.p.5
• Non-performing loan (NPL) ratios improved significantly in 5 of 6 commercial banks following digital transformation.p.9
• Net interest margin (NIM) ratios also improved significantly in 5 of 6 banks analyzed.p.9
• Bank 1 achieved notable operational efficiency gains with a BOPO mean difference of -71.821.p.7

Key insights

1. Asset quality and interest margin were the most consistent indicators of positive performance, with NPL and NIM improving in five of six analyzed banks.p.9
2. Financial performance gains following digital transformation are heterogeneous and capability-contingent rather than uniform across institutions.p.9
3. Bank 1 registered a statistically significant operational efficiency gain with a BOPO mean difference of -71.821.p.7
4. Bank 3 experienced a significant decline in profitability and operational efficiency, recording a ROA mean difference of -4.512 and an ROE mean difference of -26.758.p.7
5. Capital Adequacy Ratio (CAR) showed a statistically significant improvement in Bank 5, but remained statistically unchanged in the remaining five banks.p.8
6. Intermediation capacity measured by Loan-to-Deposit Ratio (LDR) diverged across institutions, increasing significantly in two banks while falling in three.p.9
7. Prior literature suggests that up to 70% of organizational digital transformation initiatives fail to reach their intended target metrics.p.2