Digital Technology and Financial Institutions’ Sustainability: The Mediating and Moderating Effect of Staff Competency and Training Programs

Abstract

Purpose: The financial sector is critical in driving sustainable economic growth, yet it is increasingly challenged by global environmental concerns, economic uncertainties, and evolving customer demands for more efficient and transparent services. Sustainability in financial institutions encompasses environmental, social, and economic dimensions, aiming to minimise negative impacts while enhancing long-term value creation. Adopting digital technologies such as artificial intelligence (AI), blockchain, and big data analytics has emerged as a vital strategy for addressing these challenges, promoting operational efficiency, reducing resource consumption, and fostering financial inclusion.

Method: The study adopts a positivist research philosophy, which emphasizes objectivity, quantifiable observations, and statistical analysis to test hypotheses. Due to its efficiency in accessing participants within financial institutions, a convenience sampling technique is employed to select respondents. A sample size of 275 respondents was used for the study. Primary data was collected through a structured survey questionnaire, utilising a Likert scale to measure responses.

Findings: The study concluded that digital technology significantly enhances financial institution sustainability by improving efficiency, reducing costs, and promoting innovation. The study shows a strong relationship between digital technology and staff competency, which significantly contributes to sustainability outcomes. Training programs significantly strengthen the impact of digital technology on staff competency. Staff competency fully mediates the relationship between staff competency and the relationship between digital technology and financial institution sustainability.

Unique Contribution to theory, practice and policy: Managers should view digital transformation not just as a technological shift, but as an enabler of holistic sustainability. Financial institutions should prioritize deploying advanced digital technologies such as artificial intelligence, machine learning, cloud computing, and mobile banking platforms. The study provides evidence-based insights for formulating policies that promote the strategic integration of digital technologies into financial institutions' operations to achieve sustainability goals.