BANK PERFORMANCE: THE EFFECT OF DIGITAL BANKING AND GREEN FINANCING WITH RISK MANAGEMENT AS MODERATING VARIABLE
Abstract
In the wake of globalization and the COVID-19 pandemic, the banking sector has faced
unprecedented challenges, driving the need for rapid digital transformation and
sustainable financial practices. In Indonesia, digital banking has emerged as a critical
factor in enhancing operational efficiency and meeting evolving consumer demands,
while green financing has gained prominence as part of the global push towards
sustainability. This study investigates the impact of digital banking and green financing
on bank performance, with risk management as a moderating variable. The primary
objective is to provide empirical insights into how these factors interact to influence
financial outcomes in Indonesian banks. Utilizing a quantitative research approach, the
study analyzes data from banks listed on the Indonesia Stock Exchange (IDX) from 2019
to 2023. Preliminary findings indicate that digital banking have a positive and significant
effect, while green financing has a negative significant effect to bank performance. This
study also finds empirical evidence of positive significant effect from moderating role of
risk management to bank performance. Indonesian banks are need to have a balanced
approach that integrates digital innovation with sustainable financing, supported by a
proper risk management to thrive in an increasingly competitive and environmentally-
conscious market.
Keywords: Digital Banking, Green Financing, Bank Performance, Risk Management
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DOI: http://dx.doi.org/10.33021/icfbe.v0i0.5672
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