The impact of digital innovation on competitive positioning in banking: a case study of Sterling Bank
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Background of the Study
Digital innovation has transformed the competitive landscape of the banking industry by enabling institutions to enhance service delivery, optimize operations, and engage customers more effectively. Sterling Bank has embraced digital innovation through initiatives such as mobile banking apps, artificial intelligence for customer service, and data analytics for risk management (Adeniyi, 2023). These innovations allow the bank to streamline processes, reduce costs, and offer personalized financial products, thereby strengthening its competitive positioning in a rapidly evolving market. The bank’s investment in digital transformation is aimed at differentiating itself from competitors by offering a seamless, integrated customer experience that spans multiple digital channels (Ibrahim, 2024).
Digital innovation not only improves internal efficiency but also drives customer engagement and loyalty, which are crucial for sustaining competitive advantage. Empirical studies show that banks with advanced digital capabilities are more likely to capture market share and achieve higher profitability (Chinwe, 2025). However, challenges such as integration with legacy systems, cybersecurity threats, and resistance to change among employees can impede the full benefits of digital transformation. This study will examine how digital innovation has influenced Sterling Bank’s competitive positioning by analyzing financial performance, market share data, and customer satisfaction surveys. The research aims to identify the key drivers of digital success and to provide strategic recommendations for maintaining a competitive edge in the digital era.
Statement of the Problem
Despite significant investments in digital innovation, Sterling Bank faces challenges in fully leveraging these advancements to secure a dominant competitive position. Integration issues with legacy systems and cybersecurity vulnerabilities have occasionally undermined customer confidence and operational efficiency (Oluwatobi, 2023). Furthermore, the pace of technological change often outstrips the bank’s ability to train and adapt its workforce, resulting in suboptimal utilization of digital tools. These challenges lead to a fragmented digital experience, which can dilute the bank’s competitive advantage in a market where customer expectations are continually rising. The gap between investment in digital technologies and their effective implementation creates uncertainty about the bank’s long-term competitive positioning. This study seeks to investigate the factors that hinder the full impact of digital innovation at Sterling Bank and to propose strategies that can enhance integration, boost customer engagement, and solidify its competitive edge.
Objectives of the Study
– To assess the impact of digital innovation on Sterling Bank’s competitive positioning.
– To identify challenges in the integration and utilization of digital technologies.
– To recommend strategies for enhancing digital innovation and market competitiveness.
Research Questions
– How does digital innovation influence competitive positioning at Sterling Bank?
– What challenges affect the effective implementation of digital technologies?
– What measures can improve digital integration and customer engagement?
Research Hypotheses
– H₁: Digital innovation is positively correlated with improved competitive positioning.
– H₂: Integration challenges negatively moderate the benefits of digital transformation.
– H₃: Enhanced employee training increases the effective utilization of digital tools.
Scope and Limitations of the Study
The study focuses on Sterling Bank’s digital initiatives across retail and corporate banking segments. Data will be sourced from financial reports, digital platform analytics, and customer surveys. Limitations include rapid technological evolution and potential biases in self-reported customer data.
Definitions of Terms
• Digital Innovation: The adoption and implementation of new digital technologies in banking operations.
• Competitive Positioning: The strategic placement of a bank relative to its competitors in the market.
• Legacy Systems: Older technology systems that may hinder integration with new digital platforms.
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