The The Impact of Digital Transformation on Financial Performance of Iraqi Commercial Banks: An Empirical Study
Abstract
Digital transformation has transformed the finance industry and traditional institutions need to adopt modern technologies to compete in the market. Commercial banks in the context of Iraqi banking face two problems: the need to adopt digital technologies such as electronic payment systems, mobile banking and automated internal processes and the difficulty of moving from a logistical environment and financial performance. In this study, we will assess the impact of digital transformation on the financial performance of commercial banks in Iraq in the context of the transformation away from old-school and towards digital frameworks and how digitalization impacts the performance measures. We use a quantitative research design in which panel data of a representative sample of Iraqi commercial banks over a specific fiscal year is analyzed and statistical tools like SPSS are used to measure the relationship between digital investment and profitability ratios. We find that while the initial stages of digital adoption involve significant capital expenditure, there is a very high positive correlation between digital maturity and long-term financial efficiency. Digital transformation increases efficiency at the operational level, lowers overhead costs and boosts net profit margins, providing a strategic path to policymakers and bank management to ensure that the economy of Iraq is sustainable.
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