Scaling Up Banking Performance for the Realisation of Specific Sustainable Development Goals: The Interplay of Digitalisation and Training in the Transformation Journey

Abstract

The main purpose of this study was to examine how digitalisation with a mediating role of training influences banking performance and further how banking performance helps in realisation of specific sustainable development goals (SDGs). Data were gathered from 402 employees from public, private, and foreign sector banks. Digital culture, digital technologies, and digital skillsets are the sub-scales of digitalisation. For training, three types of training (on the job training, off the job training, and special training) were considered. Banking performance was measured through balanced score card covering customer, financial, internal business process, and innovation and learning perspective. This study considered SDG1: eradication of poverty; SDG5: gender equality; and SDG8: economic growth and decent work. Partial Least Square-Structural Equation Modelling was used to examine relationship among digitalisation, training, banking performance, and the realisation of specific sustainable development goals (SDG1, SDG5, and SDG8). The results highlighted that digitalisation has a positive association with training and with banking performance (with β values of 0.692 and 0.531). The direct effect of digitalisation on banking performance (with β value is 0.316) was significant; however, the effect was enhanced when training was used as a mediating variable between digitalisation and banking performance (β: 0.367). Furthermore, the results suggest that banking performance has a positive association with realisation of specific SDGs (β: 0.867). In the designed model, it can be seen that the predictors (digitalisation and training) explained 61.1 percent of banking performance. This paper, by combining digitalisation and training with banking performance, provided an integrated approach to contribute towards the realisation of sustainable development goals (SDG1, SDG5, and SDG8). The final integrated model with digitalisation, training, and banking performance as predictors explained 75.6% of variation in exogenous variable, i.e., the realisation of specific SDGs. The results indicate an important role of digitalisation and training in scaling up banking performance for the realisation of specific SDGs.

Sustainable Development Goals and bank profitability: International evidence

“…They find that corporate sustainability practices have a significant positive impact on the financial performance of banks in Malaysia and Indonesia. Bahl et al (2023) examine how banking performance influences the realization of specific Sustainable Development Goals. They analyzed data obtained from 402 employees from public, private, and foreign sector banks.…”