This study aims to investigate the impact of human resources on bank performance in the technology era in a developing country. Driven by the force of technology and automation, bank branches and employees reduction have occurred, which raises the question of the role of humans on bank performance in the current context. The other aim of this paper is to demonstrate the collaboration between human resources and technology in driving performance. Based on the research results, practical recommendations are made to stakeholders.
Data were collected from multiple sources, including audited annual reports of Vietnamese commercial banks, the General Statistics Office of Vietnam and the World Bank. The study uses a few inference models, including feasible generalized least squares estimation on panel data from 22 commercial banks between 2011 and 2023, incorporating a unique set of human resource indicators.
Despite increasing digitalization, human resources remain a significant determinant of bank performance in Vietnam. The results of the baseline and extended models indicated that human resources have shown a significant relationship with bank performance. However, in technologically advanced banks, the collaboration between human resources and automation does not create a synergy that brings better performance.
The most prominent limitation lies in the measurement of the level of technological development. Specifically, the study employs the ICT index, which assesses the technological advancement and the readiness of banks to adopt technology. However, this index may not fully capture the complex nature of automation and digitalization, nor the synergies arising from the interaction between technology and human resources. Future research in this domain could benefit from the development of more refined measurement constructs, which may provide deeper and more nuanced insights into this subject matter.
In an era where automation is displacing millions of banking jobs globally, this study offers empirical insights into the enduring value of human resources. This provides natural experiment to test the role of human resources in bank performance. This study found a positive relationship between human resources and bank performance despite the growing integration of technological solutions. The findings provide important regulatory and practical implications for banks and the related parties.
