Can digital transformation improve commercial banks’ performance?

Digital transformation has become a strategic high point for commercial banks to compete for layout. However, whether digital transformation can satisfy the banks’ vision of improving effi-ciency and suppressing risk remains to be further discussed. This paper uses data from 90 commercial banks from 2013 to 2021 to verify the mechanism of digital transformation on bank performance and the moderating effect of digital environment construction. The study finds that: (1) Digital transformation has a facilitating effect on bank performance. From different dimensions, strategic and management digitization can promote bank performance, but business digitization adversely affects bank performance. (2) Further analysis finds that there is a nonlinear relation-ship between digital transformation and bank performance that is inhibitory and then facilitative. (3) Digital transformation promotes bank performance through two mechanisms: increased revenue diversification and reduced credit risk. (4) Enhancing the construction of new digital infrastructure and activating the digital credit function can help digital transformation improve bank performance. (5) The digital transformation of commercial banks that set up fintech sub-sidiaries has a more obvious effect on performance improvement, and the digital transformation of rural commercial banks has a poor effect.