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Integration of Digital Business Models and Corporate Governance in Strengthening Bank Stability and Resilience

Author

Listed:
  • Mandalika Jerry Charisa

    (University of Brawijaya)

  • Saifi Muhammad

    (University of Brawijaya)

  • Solimun Solimun

    (University of Brawijaya)

  • Nuzula Nila Firdausi

    (University of Brawijaya)

Abstract

This study examines the effect of business models and corporate governance on banking stability and resilience in Indonesia, with bank stability as a mediating variable. The research data covers the 25 largest banks based on total assets during the period 2018-2024 (N=175) and is analyzed using WarpPLS-based Structural Equation Modeling. The business model is measured through non-interest income diversification, funding diversification, and cost efficiency; governance through board size, independent commissioners, institutional ownership, and audit committee activity; stability through capital adequacy ratio (CAR), non-performing loan ratio (NPL), loan-to-deposit ratio (LDR), and z-score; and resilience through CAMEL indicators. The results show that business model and governance significantly affect stability and resilience, with stability proving to be an important mediator. These findings enrich the literature by integrating the Resource-Based View, Agency Theory, and Survival-Based Dynamics, and provide practical implications for banks and regulators to encourage digital business model innovation, governance strengthening, and macroprudential policies oriented towards financial system stability.

Suggested Citation

  • Mandalika Jerry Charisa & Saifi Muhammad & Solimun Solimun & Nuzula Nila Firdausi, 2026. "Integration of Digital Business Models and Corporate Governance in Strengthening Bank Stability and Resilience," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 41(1), pages 97-113, March.
    • Handle: RePEc:ris:integr:022350
    DOI: 10.11130/jei.2025017
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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