Impact of a Bank's Digitization Level on Profitability and Cost Management

Student: Suchkova Aleksandra

Educational Programme: Economics (Bachelor)

Year of Graduation: 2021

This paper examines the impact of the level of digitization of banks on one of the profitability parameters, ROE, and the cost management parameter, CIR, in order to obtain qualitative results for representative banks of Russia and Europe. The sample includes authoring index of digitization and data from 20 Russian and 20 European leading banks from Q1 2017 to Q3 2020. The analysis was conducted using a linear regression models and descriptive characteristics. The main results of the study confirm the main hypotheses about the positive impact of digital technology penetration: it improves efficiency of the banks’ performance for its shareholders and the level of associated costs in relation to profits at the same time.

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