Impact of Creative Innovation and Digital Transformation on Business Efficiency: Evidence from Commercial Banks in Vietnam

Abstract

Background: In an increasingly digital and competitive financial environment, commercial banks in Vietnam are under growing pressure to enhance their business efficiency through the adoption of creative innovation and digital transformation. These strategic imperatives demand not only technological upgrades but also organisational readiness, including internal capabilities such as employee engagement, leadership style, corporate culture, financial capacity, and managerial competence.

Objective: This study examines how creative innovation and digital transformation directly influence business efficiency in Vietnam’s commercial banking sector and identifies key organisational factors that support these two strategic drivers.

Methodology: This study employs a descriptive quantitative research design, utilising a structured survey of 942 employees from 30 commercial banks across Vietnam. The survey instrument was refined through expert consultation to ensure contextual relevance. Structural Equation Modelling (SEM) was employed to examine the relationships among internal organisational capabilities, creative innovation, digital transformation, and business efficiency.

Result: The empirical findings indicate that creative innovation management capacity and staff engagement are the two primary factors that directly and significantly influence business efficiency. Furthermore, while not the most dominant pathway, digital transformation is confirmed to play a secondary, yet statistically significant, mediating role in the relationship between the organisation's internal capabilities and ultimate performance outcomes.

Conclusion: The findings underscore the critical imperative for banking institutions in emerging markets to cultivate people-centred, innovation-driven ecosystems. The success of these ecosystems is intrinsically linked to investments in key internal capabilities. Therefore, the strategic development of staff engagement, targeted leadership development, and foundational digital readiness must be the highest organisational priority for bank executives and key stakeholders.

Unique Contribution: This study makes a novel contribution to the corporate strategy literature by empirically positing and validating the roles of digital transformation and creative innovation as dual-process mediators linking organisational capabilities to enhanced company efficiency within the rapidly evolving financial ecosystems of developing economies.

Key Recommendation: Bank executives operating in emerging regions are strongly advised to prioritise strategic investment in a people-centred, innovation-led model to enhance operational efficiency and sustain banking performance significantly. This necessitates immediate and sustained funding for employee engagement, leadership development, and structural innovation to drive and anchor digital transformation initiatives effectively.