Digitalization and its impact on commercial banks’ profitability in Vietnam
Amid the rapid development of the digital economy in Vietnam, traditional industries, including commercial banking, must recognize digitalization as both a prevailing trend and an essential requirement for sustainable development. This study utilizes the Feasible Generalized Least Squares (FGLS) reg...
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| Format: | Article |
| Language: | English |
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HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE
2024-09-01
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| Series: | Ho Chi Minh City Open University Journal of Science - Economics and Business Administration |
| Subjects: | |
| Online Access: | https://journalofscience.ou.edu.vn/index.php/econ-en/article/view/3281 |
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| _version_ | 1841527111249035264 |
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| author | Huong Mai Nguyen Huyen Thi Ngoc Pham Khue Minh Tran Mai Thi Tuyet Nguyen Yen Thi Hai Nguyen |
| author_facet | Huong Mai Nguyen Huyen Thi Ngoc Pham Khue Minh Tran Mai Thi Tuyet Nguyen Yen Thi Hai Nguyen |
| author_sort | Huong Mai Nguyen |
| collection | DOAJ |
| description | Amid the rapid development of the digital economy in Vietnam, traditional industries, including commercial banking, must recognize digitalization as both a prevailing trend and an essential requirement for sustainable development. This study utilizes the Feasible Generalized Least Squares (FGLS) regression method to examine the impact of digitalization on the profitability of Vietnamese commercial banks from 2013 to 2022. Profitability is measured by Return on Assets (ROA), while the digitalization level is represented by the ICT Index (Information and Communication Technology Development and Application Readiness Index). The model also incorporates two control variables: Credit Risk and Solvency. The findings demonstrate that digitalization has improved profitability in commercial banks. Additionally, credit risk is found to have a negative impact on the profitability (ROA) of commercial banks, while the solvency ratio shows the opposite. Based on these results, the authors propose recommendations to enhance the digitization process and consequently elevate operational efficiency and profitability in Vietnamese commercial banks. |
| format | Article |
| id | doaj-art-89d707f37ae3425ea4f60c9d26b31282 |
| institution | Kabale University |
| issn | 2734-9314 2734-9586 |
| language | English |
| publishDate | 2024-09-01 |
| publisher | HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE |
| record_format | Article |
| series | Ho Chi Minh City Open University Journal of Science - Economics and Business Administration |
| spelling | doaj-art-89d707f37ae3425ea4f60c9d26b312822025-01-16T05:23:10ZengHO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCEHo Chi Minh City Open University Journal of Science - Economics and Business Administration2734-93142734-95862024-09-0115115216410.46223/HCMCOUJS.econ.en.15.1.3281.20252211Digitalization and its impact on commercial banks’ profitability in VietnamHuong Mai Nguyen0Huyen Thi Ngoc Pham1Khue Minh Tran2Mai Thi Tuyet Nguyen3Yen Thi Hai Nguyen4National Economics University, HanoiNational Economics University, HanoiNational Economics University, HanoiNational Economics University, HanoiNational Economics University, HanoiAmid the rapid development of the digital economy in Vietnam, traditional industries, including commercial banking, must recognize digitalization as both a prevailing trend and an essential requirement for sustainable development. This study utilizes the Feasible Generalized Least Squares (FGLS) regression method to examine the impact of digitalization on the profitability of Vietnamese commercial banks from 2013 to 2022. Profitability is measured by Return on Assets (ROA), while the digitalization level is represented by the ICT Index (Information and Communication Technology Development and Application Readiness Index). The model also incorporates two control variables: Credit Risk and Solvency. The findings demonstrate that digitalization has improved profitability in commercial banks. Additionally, credit risk is found to have a negative impact on the profitability (ROA) of commercial banks, while the solvency ratio shows the opposite. Based on these results, the authors propose recommendations to enhance the digitization process and consequently elevate operational efficiency and profitability in Vietnamese commercial banks.https://journalofscience.ou.edu.vn/index.php/econ-en/article/view/3281commercial banksdigitalizationict indexprofitabilityvietnam |
| spellingShingle | Huong Mai Nguyen Huyen Thi Ngoc Pham Khue Minh Tran Mai Thi Tuyet Nguyen Yen Thi Hai Nguyen Digitalization and its impact on commercial banks’ profitability in Vietnam Ho Chi Minh City Open University Journal of Science - Economics and Business Administration commercial banks digitalization ict index profitability vietnam |
| title | Digitalization and its impact on commercial banks’ profitability in Vietnam |
| title_full | Digitalization and its impact on commercial banks’ profitability in Vietnam |
| title_fullStr | Digitalization and its impact on commercial banks’ profitability in Vietnam |
| title_full_unstemmed | Digitalization and its impact on commercial banks’ profitability in Vietnam |
| title_short | Digitalization and its impact on commercial banks’ profitability in Vietnam |
| title_sort | digitalization and its impact on commercial banks profitability in vietnam |
| topic | commercial banks digitalization ict index profitability vietnam |
| url | https://journalofscience.ou.edu.vn/index.php/econ-en/article/view/3281 |
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