Mobile Banking and Bank Performance: Do Bank Ownership Types Matter?

Ardi Paminto, Rizky Yudaruddin, Yanzil Azizil Yudaruddin, Dadang Lesmana


In Indonesia, mobile banking users and transactions continue to increase. Regulators and banks anticipate that digitalization will improve banking performance and financial stability. In contrast to technology-based financial services or FinTech, the digitization of banking services in Indonesia is considered somewhat tardy. FinTech, which offers digital services, is a threat to banks. Covering 138 commercial banks in Indonesia from 2004 to 2018, this study investigates the influence of mobile banking on bank performance in Indonesia. Additionally, this study investigates whether bank ownership influences the performance-enhancing effects of mobile banking based on bank ownership. A dynamic panel data analysis approach with a two-step GMM system is used to test the hypothesis. This study finds that mobile banking significantly improves bank profitability and stability in Indonesian banking. These results are more significant for private banks. Moreover, digitalization is crucial in the banking sector, particularly with the adoption of mobile banking because it encourages banks, particularly private banks, to perform better than those that do not use mobile banking. This is the first study investigating the impact of mobile banking on banks' performance and financial stability based on bank ownership in Indonesia.


Keywords: mobile banking, bank ownership, bank profitability, bank stability.




Full Text:



ADHITYA, A., & SEMBEL, R. (2020). The Impacts of Mobile Banking Technology Adoption on the Financial Performance and Stock Performance of Big Banks in Indonesia. South East Asia Journal of Contemporary Business, Economics and Law, 22(1), 63-73.

AHAMED, M.M., & MALLICK, S.K. (2019). Is financial inclusion good for bank stability? International evidence. Journal of Economic Behavior and Organization, 157(C), 403–427.

AMALIA, S., LESMANA, D., YUDARUDDIN, Y.A., & YUDARUDDIN, R. (2022). The Impact of Board Structure on Voluntary Environmental and Energy Disclosure in an Emerging Market. International Journal of Energy Economics and Policy, 12(4), 430–438.

ARELLANO, M., & BOND, S.R. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies, 58, 277–297.

ARIAS, J., MAQUIEIRA, C., & JARA, M. (2019). Do legal and institutional environments matter for banking system performance? Economic Research, 33(1), 2203-2228.

BALTAGI, B.H. (2005). Econometric Analysis of Panel Data. 3rd ed. Chichester: John Wiley & Sons Ltd.

BANK INDONESIA. (2017). Kajian Stabilitas Keuangan: Mitigasi Risiko Sistemik Melalui Penguatan Koordinasi Antar Institusi di Tengah Konsolidasi Perekonomian Domestik. Kajian Stabilitas Keuangan. Jakarta.

BANNA, H., & ALAM, M.R. (2021). Is Digital Financial Inclusion Good for Bank Stability and Sustainable Economic Development? Evidence from Emerging Asia. Tokyo: Asian Development Bank Institute. Retrieved from

BHATT, A., & BHATT, S. (2016). Factors affecting customer’s adoption of mobile banking services. Journal of Internet Banking and Commerce, 21(1), 161. Retrieved from

BLUNDELL, R., & BOND, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87, 115-143.

BUI, D.T., & BUI, T.M.H. (2019). How does institutional development shape bank risk-taking incentives in the context of financial openness? Pacific-Basin Finance Journal, 58, 101209.

CHAVALI, K., & KUMAR, A. (2018). Adoption of Mobile Banking and Perceived Risk in GCC. Banks and Bank Systems, 13(1), 72-79.

CULL, R., PERIA, M.S.M., & VERRIER, J. (2017). Bank ownership: Trends and implications. International Monetary Fund.

DANIYAN-BAGUDU, H., KHAN, S.J.M., & ROSLAN, A.H. (2017). The effect of mobile banking on the performance of commercial banks in Nigeria. International Research Journal of Management, IT and Social Sciences, 4(2), 74-80.

DEFUNG, F., & YUDARUDDIN, R. (2022). Economic freedom on bank stability and risk-taking in emerging economy: Indonesian case study. Cogent Business & Management, 9(1), 2112816.

DEL GAUDIO, B.L., PORZIO, C., SAMPAGNARO, G., & VERDOLIVA, V. (2021). How do mobile, internet and ICT diffusion affect the banking industry? An empirical analysis. European Management Journal, 39(3), 327-332.

FUKUYAMA, H., & TAN Y. (2022). Implementing strategic disposability for performance evaluation: Innovation, stability, profitability and corporate social responsibility in Chinese banking. European Journal of Operational Research, 296(2), 652-668.

FUSTER, A., PLOSSER, M., SCHNABL, P., & VICKERY, J. (2018). The role of technology in mortgage lending. Retrieved from

HAABAZOKA, L. (2019). A Study of the Effects of Technological Innovations on the Performance of Commercial Banks in Developing Countries - A Case of the Zambian Banking Industry. In: POPKOVA, E. (ed.) The Future of the Global Financial System: Downfall or Harmony. ISC 2018. Lecture Notes in Networks and Systems, Vol. 57. Cham: Springer, pp. 1246–1260.

HADJAAT, M., YUDARUDDIN, R., & RIADI, S.S. (2021). The Impact of Financial Distress on Cash Holdings in Indonesia: Does Business Group Affiliation Matter? Journal of Asian Finance, Economics and Business, 8(3), 373–381.

HARELIMANA, J.B. (2018). Impact of Mobile Banking on Financial Performance of Unguka Microfinance Bank Ltd, Rwanda. Journal of Harmonized Research in Management, 4(1), 26-40.

INEGBEDION, D.O., AKANDE, O.O., OLALEKAN, A., ADEYEMO, F., & ADEDUGBA, A. (2022). The Effect of Financial Inclusion and Entrepreneurship Creation among Agency Banking. Empirical Investigation of Point of Sale (POS) Card Acceptance Operators in Nigeria: Special Reference to Lagos Metropolis. Journal of Southwest Jiaotong University, 57(5), 83-92.

KARSH, S.A., & ABUFARA, Y. (2020). The New Era of Financial Technology in Banking Industry. Journal of Southwest Jiaotong University, 55(4).

KEJELA, A.B., & PORATH, D. (2022). Influence of attitude on mobile banking acceptance and factors determining attitude of end-users in Ethiopia. Journal of Internet and Digital Economics, 2(1), 68-88.

KUSUMAWARDANI, A., WARDHANI, W., MARIA, S., & YUDARUDDIN, R. (2021a). Board structure and disclosure of intellectual capital: An empirical study in an emerging market. Journal of Governance & Regulation, 10(3), 140–149.

KUSUMAWARDANI, A., YUDARUDDIN, R., & YUDARUDDIN, Y.A. (2021b). Corporate Governance's Policy on the Impact of Cash Holding in Indonesia. Universal Journal of Accounting and Finance, 9(4), 594–603. 10.13189/ujaf.2021.090407

LE, T.D., & NGO, T. (2020). The determinants of bank profitability: A cross-country analysis. Central Bank Review, 20(2), 65-73.

LESTARI, D., LESMANA, D., YUDARUDDIN, Y.A., & YUDARUDDIN, R. (2022). The impact of financial development and corruption on foreign direct investment in developing countries. Investment Management and Financial Innovations, 19(2), 211–220.

MARIA, S., YUDARUDDIN, R., & YUDARUDDIN, Y.A. (2022). The impact of COVID-19 on bank stability: Do bank size and ownership matter? Banks and Bank Systems, 17(2), 124–137.

MEIFANG, Y., HE, D., XIANRONG, Z., & XIAOBO, X. (2018). Impact of payment technology innovations on the traditional financial industry: a focus on China. Technological Forecasting and Social Change, 135, 199–207.

MITTAL, S., JOSHI, D., & LIN, L.S. (2016). Digital Banking: New Avatar – Banks Watch Out for Banks. DBS Asian Insights. Retrieved from

MUSVIYANTI, KHAIRIN, F.N., BONE, H., SYAKURA, M.A., & YUDARUDDIN, R. (2022). Structure of local government budgets and local fiscal autonomy: Evidence from Indonesia. Public and Municipal Finance, 11(1), 79-89.

NAVARETTI, G.B., CALZOLARI, G., & POZZOLO, A.F. (2017). FinTech and Banks: Friends or Foes? European Economy, 2, 9-30. Retrieved from

NEAIME, S., & GAYSSET, I. (2018). Financial inclusion and stability in MENA: Evidence from poverty and inequality. Finance Research Letters, 24, 230–237.

OZILI, P.K., & UADIALE, O. (2017). Ownership concentration and bank profitability. Future Business Journal, 3(2), 159-171.

PHAN, D., NARAYAN, P.K., RAHMAN, R.E., & HUTABARAT, A.R. (2019). Do financial technology firms influence bank performance? Pacific-Basin Finance Journal, 62, 101210.

PIERRI, N., & TIMMER, Y. (2020). Tech in Fin before FinTech: Blessing or Curse for Financial Stability? International Monetary Fund. Retrieved from

RIADI, S.S., HADJAAT, M., & YUDARUDDIN, R. (2022). Bank Concentration and Bank Stability during the COVID-19 Pandemic. Emerging Science Journal, 6, 262-274.

SAIF-ALYOUSFI, A.Y., SAHA, A., & MD-RUS, R. (2020). The impact of bank competition and concentration on bank risk-taking behavior and stability: Evidence from GCC countries. North American Journal of Economics and Finance, 51, 100867.

SCOTT, S.V., VAN REENEN, J., & ZACHARIADIS, M. (2017). The long-term effect of digital innovation on bank performance: An empirical study of SWIFT adoption in financial services. Research Policy, 46(5), 984–1004.

SENOU, M.M., OUATTARA, W., & HOUENSOU, D.A. (2019). Financial inclusion dynamics in WAEMU: Was digital technology the missing piece? Cogent Economics and Finance, 7(1), 1665432.

SHABAN, M., & JAMES, G.A. (2018). The effects of ownership change on bank performance and risk exposure: Evidence from Indonesia. Journal of Banking & Finance, 88, 483-497.

SHAIKH, A.A., ALAMOUDI, H., ALHARTHI, M., & GLAVEE-GEO, R. (2022). Advances in mobile financial services: a review of the literature and future research directions. International Journal of Bank Marketing.

SHAIKH, A.A., & KARJALUOTO, H. (2016). Mobile banking services continuous usage - case study of Finland. Proceedings of the 49th Hawaii International Conference on System Sciences, 5-8 January 2016, Koloa, Hawaii, pp. 1497-1506.

SHAIKH, A.A., GLAVEE-GEO, R., & KARJALUOTO, H. (2017). Exploring the nexus between financial sector reforms and the emergence of digital banking culture - Evidences from a developing country. Research in International Business and Finance, 42, 1030-1039.

SRAIRI, S. (2019). Transparency and bank risk-taking in GCC Islamic banking. Borsa Istanbul Review, 19(1), 64-74.

SUDARYANTIA, D.S., SAHRONIB, N., & ANE, K. (2018). Analisa Pengaruh Mobile Banking terhadap Kinerja Perusahaan Sektor Perbankan yang Tercatat Di Bursa Efek Indonesia. Jurnal Ekonomi Manajemen, 4(2), 96-107.

TAM, C., & OLIVEIRA, T. (2017). Literature review of mobile banking and individual performance. International Journal of Bank Marketing, 35(7), 1044-1067.

TAN, Y. (2016). The impacts of risk and competition on bank profitability in China. Journal of International Financial Markets, Institutions and Money, 40, 85-110.

ULFAH, Y., YUDARUDDIN, R., & YUDARUDDIN, Y.A. (2021). Ownership composition and intellectual capital disclosure: Indonesia as a case study. Investment Management and Financial Innovations, 18(2), 37-47. 10.21511/imfi.18(2).2021.04

WINDMEIJER, F. (2005). A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Econometrics, 126, 25-51.

WIRDIYANT, R. (2018). Digital Banking Technology Adoption and Bank Efficiency: The Indonesian Case. Jakarta: Otoritas Jasa Keuangan.

YUDARUDDIN, R. (2017a). Economic conditions and lending behavior; Evidence from the regional development banks in Indonesia. International Journal of Economic Research, 14(13), 105-114. Retrieved from

YUDARUDDIN, R. (2017b). The impact of economic conditions on bank profitability of regional development bank in Indonesia. International Journal of Applied Business and Economic Research, 15(19), 1-12. Retrieved from

YUDARUDDIN, R. (2020). Determinants of micro-, small-and medium-sized enterprise loans by commercial banks in Indonesia. Journal of Asian Finance, Economics and Business, 7(9), 19-30.

YUDARUDDIN, R. (2022a). Bank Concentration and Stability in Central Asia: The Effect of Capital Regulation and Financial Freedom. Journal of Eastern European and Central Asian Research, 9(2), 206-216.

YUDARUDDIN, R. (2022b). Financial technology and performance in Islamic and conventional banks. Journal of Islamic Accounting and Business Research.

YUSGIANTORO, I., SOEDARMONO, W., & TARAZI, A. (2019). Bank consolidation and financial stability in Indonesia. International Economics, 159, 94-104.


  • There are currently no refbacks.