Digitalization and Sustainable Development Goals: Enhancing Electronic Financial Reports Quality in Banking

Introduction: This study captures the effect of digitalization and Sustainable Development Goals (SDGs) on the quality of electronic financial reports in one developing nation, specifically the Jordanian banking sector. Given the ever-evolving landscape where financial institutions embrace digital technologies while integrating sustainability principles into their operations, it is essential to examine the interplay of both trends in enhancing the transparency and accuracy of their financial reporting. Methods: Data were collected from the banking professionals in Jordan using a structured questionnaire. The responses of two hundred and four valid respondents were analyzed accordingly using the Partial Least Squares Structural Equation Modeling (PLS-SEM). It tested the relationships of digitization, SDG integration, and the quality of electronic financial reporting. Results: The results indicate that digitalization and SDG integration positively affect the quality of electronic financial reports. On the other hand, SDG integration (Coefficient = 0.214) was more substantial than digitalization (Coefficient = 0.150), which indicates that good governance, environmental, and social improvements add value to financial reporting by providing more transparency and accuracy. Moreover, these digital technologies facilitate the finance departments' data governance, reporting, and regulatory compliance. Conclusions: This study contributes to the literature on the importance of digitalization and sustainability integration for SME financial reporting in Jordanian banks. Banks that adopt digital tools and align with SDGs are also better prepared to meet stakeholder expectations and comply with regulatory requirements. Further research can investigate these factors in determining the long-term economic sustainability of these variables and how they ultimately shape the financial reporting standards of these developing economies.