Tag Archive for: DEA.

The digital banking industry in Indonesia has experienced significant growth, driven by changing customer demands, technological advancements, and regulatory support. The digitalization of Indonesian banks aims to enhance cost efficiency. This research utilizes the Data Envelopment Analysis (DEA) method to measure the cost efficiency of Indonesian commercial banks. The research includes digital banks as business units and neo-banks, comparing their cost efficiency from 2012 to 2020, with digital banks and neo-banks generally operating more efficiently than non-digital banks. The findings highlight the significant impact of digital transformation on cost efficiency in the banking industry. Stakeholders, including banks and financial authorities, can utilize these insights to plan strategies, reduce operating costs, and enhance cost efficiency. Further research can explore additional factors, such as macroeconomic influences, and categorize commercial banks based on their core capital categories.