WILL DIGITAL BANKING TRANSFORMATION AFFECT CONSUMER BEHAVIOR IN THE FINANCIAL SECTOR?

This study aims to examine how customer communication, trustworthiness, transparency, and innovation influence the transformation of digital banking. It also investigates the impact of digital banking transformation on customers’ financial behavior. Data were collected using a well-structured questionnaire and distributed to digital bank customers of ten banks in Indonesia. A total of 187 digital bank customers participated in this study. For data analysis, we employed Partial Least Squares Structural Equation Modeling (PLS-SEM) using WarpPLS 6.0. The results show that customer communication, trust, transparency, and innovation positively affect digital banking transformation. It also indicates that the digital banking transformation positively impacts customer financial behavior. This study highlights previously unexplored aspects, particularly the role of digital banking transformation as a stimulant that encourages consumers to actively manage, plan, and invest their funds, which can significantly influence their financial decision-making behavior. The findings of this study highlight the importance of providing customers with a comprehensive understanding of the presence of digital banks. The advent of digital banks is expected to alter financial behaviors in the consumer decision-making process. Additionally, the government may safeguard and reassure individuals about the use of digital banking. By accelerating the pace of digital transformation and enacting appropriate regulations, Indonesia is poised to fulfill its mission of becoming a developed nation.