Digital transformation, risk-taking and bank profitability: does gender diversity matter?

Purpose This paper aims to investigate the association between digital transformation (DT), risk-taking and bank profitability in the Jordanian banking sector, as well as explore the moderating role of gender diversity in the said relationship. Design/methodology/approach The study gathers data from 12 ASE-listed commercial banks over the 2010–2023 period. The econometric panel data analysis uses the primary approach of ordinary least squares regression, supplemented by the generalised method of moments, two-stage least square and a dynamic model for handling endogeneity and causality issues within the framework. Additionally, the paper employs different measurement of the dependent variable to validate the main findings. Findings The outcomes indicate that DT has a significant positive relationship with bank profitability. Furthermore, risk-taking has a significant negative connection with bank profitability. Additionally, gender diversity significantly moderates the effect of risk-taking on bank profitability. These findings align with the Information Systems (IS) Success Model, the Theory of Asymmetric Information and Behavioural Theory. Practical implications Overall, this study helps bankers, stakeholders, directors, investors and policymakers understand how bank profitability is influenced by DT and risk-taking in the context of emerging nations like Jordan. Originality/value To the best of the authors’ knowledge, this research is among the first to empirically examine the relationship between DT and risk-taking on bank profitability in emerging nations, such as Jordan. Unlike past studies that mainly focus on developed banking markets, this paper provides an integrated framework that determines the complex interaction between gender diversity and risk-taking in an emerging banking context. Theoretically, it contributes to the IS Success Model, the Theory of Asymmetric Information and Behavioural Theory, enriching the understanding of factors influencing banking profitability in emerging economies.