Does Digital Transformation Affect Banks’ Resilience? A Perspective Analysis of Strategic IT Governance Competence 2.0 in Commercial Bank in Indonesia

The COVID-19 pandemic has accelerated sustainability and digital transformation across industrial sectors. This situation encourages banks to adopt financial technology (fintech) and its aligned governance structures. So far, IT governance is dominated by the silo management paradigm, which is the main challenge in aligning strategy. Top management teams face the challenge of increasing strategic IT governance competence (ITGOV) following increasing regulations and best practice standards. In addition, banks are also required to discloseaction plans on sustainable finance and risk management of information technology (IT). This research developsan ITGOV Index based on the COBIT5 standard. We use content analysis of banks' annual report disclosure as aproxy for the maturity level of ITGOV practices, consisting of leadership and project process excellence. We examine the effect of the ITGOV Index on the banks' resilience through fintech adoption, operational efficiency, and profitability. We use the I/O Intermediation Stochastic Frontier Analysis to determine the technology change of 40 banks listed on IDX during 2015–2021. The research results show that ITGOV does not directly affect bank resilience, but there is a mediating role in fintech adoption and operational efficiency. Besides that, ITGOV harms profitability in the early stages due to adapting the governance structure. However, the sensitivity analysis shows that the negative effect weakens at t+1 and t+2 as the maturity level of ITGOV increases, potentially increasing bank resilience. The results give practical implications for commercial banks and policy recommendations for regulators to accelerate sustainable digital transformation.