Prihatin Lumbanraja

In the digitalization era, banks strive to implement digital transformations; digital culture, competence, and leadership become essential factors to advance the company’s digitalization. Digital transformation is indispensable in improving employee performance amidst rapid digital advancements, helping companies stay competitive and avoid falling behind fintech and banking rivals. The study aims to examine the influence of digital transformations on banking employee performance in Indonesia, targeting state-owned banks. Primary data were gathered through questionnaires involving 100 participants. Data analysis employed partial least squares structural equation modeling (PLS-SEM) to assess the influence of independent on dependent and mediating variables. The results demonstrate that digital culture (p < 0.05), digital competency (p < 0.05), and digital leadership (p < 0.05) positively and significantly influence employee performance. Self-efficacy does not function as a substantial mediating variable between digital culture (p > 0.05) or digital competence (p > 0.05) and employee performance. However, self-efficacy is a crucial mediating variable connecting digital leadership to employee success (p < 0.05). The study demonstrates that digital transformation in terms of culture, competence, and leadership can improve performance. Self-efficacy is able to mediate the effect of digital leadership on employee performance but fails to affect the influence of digital culture and digital capabilities on the performance of banking employees.

Acknowledgment
The authors thank Universitas Sumatera Utara, especially the Research Institute, for their support. Acknowledgments are also expressed to the Kementerian Pendidikan dan Riset through the DRTPM program (number: 92/UN5.4.10.S/PPM/KP-DRTPM/2024), which has provided intellectual and financial assistance. The authors would also like to thank the Management Science Study Program, Universitas Sumatera Utara.