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Analysis of the impact of bank digitization process on liquidity creation and risk-taking

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  • Wang, Lu
  • Zhao, Xinli
  • Wan, Ling

Abstract

This article examines the impact of digital transformation on business operations of 162 commercial banks in China, sampled over the period 2012–2022, with a particular focus on liquidity creation. The findings indicate that the process of digital transformation within these banks results in a reduction in liquidity creation. This outcome is largely due to the influence of management digitalization, as digital transformation effectively curbs liquidity creation by decreasing banks' willingness to take risks.

Suggested Citation

  • Wang, Lu & Zhao, Xinli & Wan, Ling, 2025. "Analysis of the impact of bank digitization process on liquidity creation and risk-taking," Finance Research Letters, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325004970
    DOI: 10.1016/j.frl.2025.107234
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    References listed on IDEAS

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    Cited by:

    1. Wafa Khémiri, 2025. "Does High Liquidity Creation Reduce the Efficiency of GCC Islamic Banks? The Role of Sustainability and Governance Factors," Working Papers 1793, Economic Research Forum, revised 20 Sep 2025.

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