THE ROLE OF DIGITAL ADOPTION IN A COMPETITIVE LANDSCAPE: A CASE STUDY OF SBI’S FINANCIAL HEALTH

Abstract

Digital adoption has become a critical factor for success in the contemporary banking landscape. This study investigates the relationship between digital adoption and financial performance metrics at the State Bank of India (SBI), a leading Indian financial institution. We employ linear regression analysis to examine the associations between digital adoption and three key metrics: Return on Equity (ROE), Return on Assets (ROA), and Net Interest Margin (NIM). The findings reveal strong positive and statistically significant relationships between digital adoption and both ROE and ROA, suggesting that SBI’s digital transformation strategy has contributed to improved profitability and efficiency. However, the link between digital adoption and NIM was inconclusive. We acknowledge limitations, including the focus on a single data set and the exclusion of other potential influencing factors. Future research incorporating additional variables and a broader timeframe could offer a more comprehensive understanding of the multifaceted determinants of SBI’s financial health. Overall, this study highlights the potential of digital adoption as a driver of positive change for banks, while emphasising the need for continued exploration of its complex effects on financial institutions.