Research on the Impact of Digital Transformation of Commercial Banks on Profitability

Under the background of digital finance, this paper uses Stata to empirically study the impact of digital transformation on the profitability of commercial banks. This study examines how digital transformation affects the profitability of commercial banks by developing a fixed effect regression model using data from 16 Chinese listed commercial banks from 2012 to 2021 as research samples. Furthermore, the heterogeneity analysis is conducted to investigate the difference of the impact of digital transformation of different types of commercial banks on profitability. The research results show that digital transformation significantly increases the profitability of commercial banks. The digital transformation of large state-owned commercial banks cannot significantly improve their profitability, while the digital transformation of joint-stock commercial banks and urban commercial banks can significantly improve their profitability. Finally, based on the research results, suggestions are made for commercial banks and financial regulators.