Open Access
American Research Journal of Business and Management
ISSN (Online): 2379-1047
DOI: 10.46568/arjbm
ANALYSIS THE EFFECT OF INFORMATION TECHNOLOGY CAPABILITY, BUSINESS INNOVATION, DIGITAL DISRUPTION AND DIGITAL DISRUPTION REACTIONS ON SUSTAINABLE BANKING PERFORMANCE
Abstract
Banks have an exclusive intermediary responsibility in maintaining sustainable development and have a demanding position related to digital
technology development that requires banks to make adjustments. Technological innovations in financial services (FinTech) are overgrowing at
this time. Referring to that, this research intends to examine more deeply the effect of information technology capabilities, business innovation,
digital disruption and digital disruption reactions on sustainable banking performance. The object of the research was 54 banks that were
categorized as Book I to Book IV Banks based on the decision of the Financial Services Authority (OJK). The sample used was 205 respondents
who served as Chief Executive Officer (CEO)/ Chief Financial Officer (CFO) / Chief Technology Officer (CTO) / General Manager / Manager / Vice
President. Purposive sampling used to determine the sample and Structural Equation Model (SEM) used for the analytical method. This study
indicates that the direct effects of information technology capability and digital disruption reactions have a positive and significant effect on
sustainable banking performance, and digital disruption has a positive and significant effect on digital disruption reactions. Only banking business
innovation is having no significant effect on sustainable banking performance. While the indirect effect of digital disruption on sustainable
banking performance mediated by the reaction to digital disruption shows positive and significant results.
The ability of qualified information technology supported by digital capabilities and investment in human capital through development with
training and dissemination of digital product/service development will encourage higher banking performance. Whereas business innovations
that did not significantly effect bank performance, banks must synergize and collaborate with digital service providers outside the bank.
Also, digital disruption has a positive effect on digital disruption reaction so that banks are expected to quickly and appropriately integrate
digital disruption into the corporate strategy in the form of RBB (Bank Business Plan) because this will positively effect sustainable banking
performance. The limited research related to digital reaction makes this research as one of the essential studies for banks so that banking
management can blend in the banking strategy so that the banking business system so that bank financial technology can continue to make
adjustments to information technology so that it makes banking performance sustainable and competitive.
