The level of digital transformation affecting the competitiveness of banks

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The article examines the competitiveness of Ukrainian banks influenced by economy digitalization, the dynamic spread of electronic payments and e-commerce, as well as innovative technologies aimed at providing digital services. When shifting to an Online Platform business model, a bank can expand its range of banking products, attract more customers, thereby forming a competition policy and gaining competitive advantages. The paper aims to assess the digitalization level affecting the general competitiveness of banks and its components based on Ukrainian banks. For this purpose, the following methods were used: standardized input statistical indicators, comparison and ranking, a cluster analysis, and a regression and correlation analysis. The cluster analysis confirmed the current role of digitalization as a competition driver that determines the competitive advantages of banks and creates additional opportunities to expand the customer base and the range of services. The correlation and regression dependence of the competitive position identified by the activity indicators of certain banks on the level of competitive digitalization confirmed a close direct impact on the competitive position of personal deposits arising from the development of digital banking technology; the pre-tax income, profiles of assets and personal loans, and corporate deposits are subject to a significant direct impact, while the weakest direct impact determines corporate loans. The foregoing substantiates the feasibility of large-scale introduction of innovative digital technologies by banks to maintain competitive positions in the banking sector of the economy. Applying the proposed approach based on certain regression equations, managers of Ukrainian banks will be able to assess the efficiency and make appropriate decisions concerning investing in digital tools and services.

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    • Figure 1. Dendrogram by complex indicators illustrating the competitive capacity level by financial indicators and the digital transformation level
    • Figure 2. Graphical interpretation of the bank cluster characteristics by the competitive capacity level
    • Figure 3. Dependence of the competitive capacity of banks on the digital transformation level
    • Table 1. Linear data transformation based on financial indicators designed to analyze the competitive capacity of Ukrainian banks
    • Table 2. Linear data transformation based on the digital transformation indicators designed to analyze the competitive capacity of Ukrainian banks
    • Table 3. Assessment of the competitive capacity of Ukrainian banks
    • Table 4. Characteristics of bank clusters by the level of competitive capacity
    • Table 5. Dependence of the competitive position by certain financial indicators of banks’ activity on the competitive level of digital transformation (x)
    • Conceptualization
      Oleh Kolodiziev, Olha Lozynska
    • Formal Analysis
      Oleh Kolodiziev, Myroslav Kulchytskyy
    • Methodology
      Oleh Kolodiziev, Olha Lozynska
    • Supervision
      Oleh Kolodiziev, Olha Lozynska
    • Validation
      Oleh Kolodiziev, Mykhailo Krupka
    • Data curation
      Mykhailo Krupka, Nataliya Shulga
    • Project administration
      Mykhailo Krupka, Myroslav Kulchytskyy
    • Writing – original draft
      Mykhailo Krupka, Nataliya Shulga
    • Investigation
      Nataliya Shulga, Myroslav Kulchytskyy
    • Writing – review & editing
      Nataliya Shulga, Olha Lozynska
    • Visualization
      Myroslav Kulchytskyy, Olha Lozynska