Econometric Analysis of Assessing the Impact of Bank Activity Transformation on Operational Efficiency in the Context of Digital Technologies

Sardor Kholdorov^1,*, Iskandar Yuldoshev²

¹PhD, Senior Lecturer, Department of “Economics and Management”, Tashkent State University of Economics, Uzbekistan

²Head of department at “BRB” JSC bank, Uzbekistan

Emails: s.xoldorov@tsue.uz; abdurashidugli@gmail.com

Abstract

This study examines the impact of digital transformation on the operational efficiency and financial performance of commercial banks in Uzbekistan, focusing on key indicators such as the Cost-to-Income Ratio (CIR) and Return on Assets (ROA). Utilizing regression analysis based on 63 observations, the results reveal that digital transformation significantly enhances bank performance. A 1% increase in IT investment share reduces CIR by 0.53% in the subsequent year, while mobile banking adoption (coefficient 1.224) and IT-related revenue (coefficient 0.22) substantially improve ROA. Expanding ATM networks also lowers CIR by 0.191 per unit, highlighting the role of automation. However, state-controlled banks exhibit lower efficiency, with a 4% reduction in ROA and higher CIR due to social obligations. Inflation and bank card growth showed statistically insignificant effects on CIR, underscoring the stable, long-term benefits of digital technologies. The findings emphasize the critical role of IT investments, mobile banking, and digital retail channels in reducing operational costs and boosting profitability, offering actionable insights for enhancing the competitiveness of Uzbekistan’s banking sector.

Keywords: Digital Transformation; Commercial Banks; Uzbekistan; Cost-to-Income Ratio (CIR); Return on Assets (ROA); IT Investments; Mobile Banking; Operational Efficiency; Financial Performance; Regression Analysis; ATM Networks; State-Owned Banks; Automation; Digital Retail Channels; Profitability