Factors affecting the digital transformation in operational process of commercial banks in Vietnam

Abstract

Research purpose: The paper aims to identify and understand the factors that influence the intention of Vietnamese commercial banks to adopt new digital technologies for automating their operational processes. Research motivation: In recent years, the banking sector in Vietnam has witnessed significant transformations, especially amid the Covid-19 pandemic. The rapid advancement of technology, coupled with changing consumer preferences towards digital platforms, has prompted Vietnamese banks to invest heavily in technology. Research design, approach, and method: The research model is built on the T-O-E framework of Tornatzky et al. (1990). It includes one dependent variable, ‘Intention to Adopt’ and five independent variables, namely ‘Relative Advantage’; ‘Complexity’; ‘Top Management Support’; ‘Competency’; and ‘Competitive Pressure.’ These constructs were selected based on a combination of theoretical foundations and direct interviews. Main findings: The results show that key factors influencing success include the relative advantage of digital transformation, complexity management, top management support, workforce competencies, and competitive pressures. Notably, complexity does not necessarily hinder digital adoption, as banks have strategies to navigate it. External factors, particularly market competition, drive banks to embrace digital transformation. Leadership's role, particularly top management support, is pivotal in this process. Practical/managerial implications: Bank managers should actively communicate and emphasize the advantages of their digital transformation endeavors both internally and externally, focusing on how it enhances customer experiences and streamlines operations, investing in training programs, particularly in digital technologies. Lastly, it's crucial to address any perceived complexities related to digital transformation proactively, utilizing effective change management strategies, clear guidelines, and continuous employee support throughout the adoption process.