Measuring the Impact of Digital Banking Services on the Financial Performance of Banks: An Applied Case Study on the Banque Extérieure d’Algérie (BEA) Using Lasso and ARDL-Lasso Methods

Abstract

This research paper investigates the impact of digital banking services on the financial performance of Algerian banks, explicitly framing the Banque Extérieure d’Algérie (BEA) as a case study. To achieve this, the study applied an econometric approach using Lasso regression and the ARDL-Lasso model, with Return on Assets (ROA) as the main performance indicator. The analysis included digitalization variables such as the number of active CIB card users, accounts opened via mobile apps, digital banking users, and ATM/POS transactions. The findings show that only the number of active CIB card users had a significant positive effect on ROA, suggesting that direct and regular customer use of digital payment tools is key to improving financial performance. Within the context of this case study on BEA, the remaining digital variables showed no significant impact, implying that the presence of digital services alone is insufficient unless effectively adopted by clients.