Financial Technology, Sustainable Finance, and Operational Efficiency: The Moderating Role of Corporate Governance

Background: Digital transformation and sustainability require banks to expand digital and sustainable finance initiatives while maintaining efficiency and profitability. For Indonesian KBMI 4 banks, these investments create opportunities but also increase operational and compliance costs, making their impact on profitability and the role of corporate governance important to examine. Objective: This study examines whether financial technology adoption, sustainable finance innovation, and operational efficiency affect bank profitability and whether corporate governance moderates these relationships in Indonesian KBMI 4 banks. Methods: The study uses a quantitative explanatory design and secondary data from annual reports, sustainability reports, corporate governance reports, and official bank publications for 2020–2025. The sample comprises Bank Central Asia, Bank Mandiri, Bank Negara Indonesia, and Bank Rakyat Indonesia, yielding 24 balanced bank-year observations. Panel-data estimation and moderated regression analysis are employed. Results: Financial technology adoption has a positive but insignificant relationship with ROA, while sustainable finance innovation has a negative but insignificant relationship. BOPO has a negative and significant effect on ROA. Corporate governance does not significantly moderate the fintech–ROA or sustainable finance–ROA relationships but significantly moderates the BOPO–ROA relationship. Conclusion: The findings suggest that digitalization and sustainable finance initiatives do not automatically translate into short-term profitability, whereas cost discipline is more directly associated with profitability. Corporate governance appears particularly important in shaping how operational efficiency is translated into bank profitability.