The digital transformation of banking operations and its impact on the capital adequacy index

Abstract

The banking sector, or what is also called the banking industry sector, is one of the important sectors affecting economic growth.  The development of the efficiency of the banking system and the quality of its services provided can lead to an increase in the economic growth rate of any society, and this sector has witnessed tremendous technological developments, and the banking industry has known the application of new systems and means with the beginning of the transition to the era of knowledge and information.  The study aims to know the implications of applying the digital transformation of banking operations on the capital adequacy index in the study sample banks, by analyzing the indicators of digital transformation with its dimensions (RTGS real-time settlement system, electronic clearing ACH) and the capital adequacy index. Data was collected from the published annual reports.  For the sample, consisting of (8) private banks and for the period (2012-2021), and the EVIEWS 10 program was adopted in extracting the results of the standard analysis, as the research reached a set of conclusions, the most important of which is the existence of a significant correlation and impact between the digital transformation of banking operations and the adequacy index  Capital, in addition to the fact that the surveyed banks maintain a greater amount than necessary within the capital adequacy index, as it amounted to (194.68%), and among the recommendations reached by the study is the need to increase contracting with companies that adopt digital technology, to ensure the development of financial services that enable banks to  Reaching the optimal capital adequacy ratio.