Analysis of Banking Digital Transformation and Front-Line Staff Efficiency in the Indonesian Banking Sector (2020–2024)

Abstract

Digital transformation has changed operational and service patterns in the banking industry,
including the management of human resources who interact directly with customers. This
research aims to analyze the role of banking digital transformation in the efficiency of the
number of front line employees in the Indonesian banking sector during the 2020–2024 period.
The research uses a quantitative approach with an explanatory design and utilizes secondary
data in the form of panel data, namely a combination of cross section data from several banks
and time series data for the 2020–2024 period. The research sample was determined using a
purposive sampling technique based on the criteria of consistent availability of annual reports,
the existence of digital banking services, and completeness of data regarding digital
transactions, workforce and office networks. Data was obtained from the annual reports of each
bank, the Financial Services Authority, Indonesian Banking Statistics, and Bank Indonesia.
Analysis was carried out using descriptive statistics and panel data regression. The research
results show that the increase in the use of mobile banking, internet banking, self-service
technology, and automation of banking services goes hand in hand with reduced dependence
on transactions through physical offices and provides opportunities for banks to increase service
productivity without having to increase the number of front line employees proportionally.
Digital transformation also encourages changes in workforce functions from routine and
transactional activities towards functions that are more consultative, relational and value-added.
However, the efficiency of the number of front line employees is not only influenced by digital
transformation, but also by changes in office networks, bank size, organizational restructuring,
business strategy, and operational conditions of each bank. This research concludes that digital
transformation plays a role as a strategic factor in encouraging efficiency and optimizing the
front liner workforce in the Indonesian banking sector.