Impact of Digitization on Financial Performance: Mediating Role of Servitization

Abstract

The study investigates the effect of digitization on financial performance and the mediating role of servitization. The positivist philosophy was adopted, leading the researcher to use the deductive approach and a quantitative research design. Primary cross-sectional data were acquired through a questionnaire with a sample size of 300 participants. The researchers used the purposive sampling technique to achieve the research objectives. The PLS-SEM software is employed for data analysis due to the complexity of the model. A simple regression model is used to test the hypotheses. The study's findings suggest that digitization insignificantly positively impacts financial performance, and servitization mediates the relationship between digitization and bank performance. As Pakistan is an underdeveloped country and the size of the Pakistan banking sector is too small, corporate governance is reluctant to adopt and implement technological advancement in the banking sector in Pakistan due to its cost. In the future, the relationship might be significant among the construct.