DIGITAL TRANSFORMATION AND FINANCIAL GOVERNANCE IN DEPOSIT MONEY BANKS: THE MEDIATING ROLE OF HUMAN RESOURCE MANAGEMENT AND THE MODERATING EFFECT OF INSTITUTIONAL ENVIRONMENT IN SOKOTO METROPOLIS

Abstract

Digital transformation is fundamentally reshaping the banking industry in big ways that will affect how money is managed. Previous research has predominantly concentrated on technology outcomes, with insufficient emphasis on the organisational mechanisms by which digital transformation affects governance, especially in emerging economies. This research investigates the impact of digital transformation on financial governance in deposit money banks (DMBs), emphasising the mediating function of human resource management (HRM) and the moderating influence of the institutional environment in Sokoto metropolis, Nigeria. Utilising the Resource-Based View, Dynamic Capabilities Theory, and Institutional Theory, the research formulates and evaluates an integrated model that encompasses technical, organisational, and contextual dynamics. Data were gathered from 312 employees of chosen DMBs and examined by Partial Least Squares Structural Equation Modelling (PLS-SEM). The results show that digital transformation has a favourable but moderate direct effect on financial governance and a substantial effect on HRM. HRM greatly improves financial governance and also somewhat mediates the link between digital transformation and financial governance. The institutional context also has a small but positive effect on this relationship. The research illustrates that the governance advantages of digital transformation are rooted in capabilities rather than solely in technology. It shows that HRM is a key connection between digital transformation and governance results, and it stresses how important it is to have supportive institutional frameworks. The results give bank managers and regulators useful information on how to make sure that digital investments are in line with the growth of human capital and the effectiveness of regulations in emerging economies.