DIGITAL TRANSFORMATION IN ACHIEVING SUSTAINABILITY IN
ECONOMICS AND FINANCE
Derryl Deborah
Arizona State University
Course
Professor Masya
March, 2024
Week 1
Introduction
Industry 4.0, resulting in a shift towards digital technology, artificial intelligence, and
IoT, is revolutionizing sustainability. These technologies connect the physical and digital
worlds, enabling efficient solutions and real-time monitoring of resource use. Artificial
intelligence and data analytics enable informed decision-making, improving energy
efficiency and supply chain management. In this increasingly competitive environment, the
inevitable shift towards digitalization is referred to as the "digital imperative". However,
challenges such as data privacy, cybersecurity, and unequal access to technology still exist
(Guandalini, 2022).
Digital transformation itself is a process driven by digital technology that has created
new business models and can disrupt markets and industries around the world. It causes
disruption in organizations and has a major impact on value creation, strategy, and structure
mechanisms organization. With the digital transformation of business, some management
practices change, and this can have an impact on the sustainability of the organization. The
formation of digital organizations is the result of this transformation, with the assets of
artificial intelligence and computer capital changing their growth the most. (Feroz et al.,
2021). In the industrial era 4.0, industrial development and digital transformation that have
occurred over time can result in the risk of business disruption due to the intense competition
faced from both old companies and new entrants. Conventional companies have lost the
opportunity to survive. Some prominent examples can be seen in the global market (El Hilali
et al., 2020). Based on Kayikci's (2018) analysis, not only manufacturers but their entire
logistics chain and emphasize the importance of the supply chain for digital transformation.
Supply chain digitization creates transparency and helps decentralization and connectedness.
It also enables real-time tracking and benefits the sustainability of the industry. Using
emerging digital and information technologies to implement the Internet of Things (IoT) and
services in the Industry 4.0 era makes business and engineering processes deeply integrated.
This enables flexible, efficient, and environmentally friendly production with high quality
and sustainability. As Gomez-Trujillo and Gonzalez-Perez (2022) state, incorporating
digitalization and sustainability into corporate strategy requires structural changes at the
organizational level. This represents a new role for companies to take in the business
ecosystem, and requires changes in strategy and even business models. To identify truly new
business value prospects, an immediate commitment to sustainability is required.
Various articles have been published on achieving sustainability from various
perspectives. There is a gap in the literature on the relationship between digital
transformation and sustainability (El Hilali et al., 2020). Therefore, it is necessary for this
study to further understand the relationship and impact of digital transformation on aspects of
a company's social responsibility, society, performance and the environment. This research
aims to summarizes the results of previous research on the relationship between digital
transformation and business sustainability.
This research analyzes the existing academic literature on the relationship between
digitalization and sustainability to clarify the use of an overarching digital transformation for
sustainability purposes. The research was guided by the following research questions: RQ:
"How can sustainability be enhanced through digital transformation?"
Literature Review
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
Digital Transformation
Digital transformation can be defined as the application of new digital technologies
that have the potential to improve business operations and markets, such as improving
customer experience and satisfaction, minimizing operations and becoming a new business
model. The increasing number of digital technologies entering the market has encouraged
many organizations to carry out digital transformation of their business. It has become an
important agenda for top management and is considered a process that considers the present
and future of how digital technology affects business models. Others define digital
transformation as a process in which digital technologies and digital capabilities create value
by stimulating business models, customer experiences, and operational processes (Feroz et
al., 2021).
Digital transformation is the most profound and accelerated transformation in
business activities, processes, competencies, and models to strategically and prioritized
utilize changes in digital technology and its impact. The main objectives of digital
transformation are customer-centric processes, flexibility, and cost reduction. Enabling digital
transformation with cloud computing, mobile computing, fog computing, big data, data
science, business analytics, social computing, Internet of things (IoT). The focus of digital
transformation is the changes that occur within the organization and at various levels, such as
technology, governance, strategy, human resources, leadership, and culture. Digital
transformation is related to digital innovation, characterized by Mainly information
technology plays an important role and involves stakeholders, transformation, knowledge
management and supply chains that are influenced by demand. Sustainability is now an
important element in a company's strategic planning (Gomez-Trujillo & Gonzalez-Perez,
2022). A more modern paradigm known as "digital transformation" is made possible by the
widespread use of digital technologies including analytics, cloud computing, mobile
computing, and social computing. These technologies, including broadband communications
and shared infrastructure, facilitate changes that lower the total cost of IT ownership. Cloud
computing helps deliver computing power through cloud technology and makes it available,
much like an electric utility. Businesses use analytics to manage risk and optimize resource
usage. E-business (mobility) solutions, first-class logistics, and broadband connectivity are
becoming increasingly important due to expectations for "instant interaction and
coordination, as well as the ability to share information with others" emphasis on lean
manufacturing and minimum inventory" (Chandola, 2015).
Sustainability
In a general definition, sustainability is described as a three-legged stool in which the
economy, environment, and society function as the three legs. Defining "sustainable use" as
development for the needs of the current generation without compromising the ability of
future generations to meet their needs. The concept of sustainability is dependent on the size
of the company, the larger the company, the better and deeper the sustainability, while small
companies generally relate sustainability to social aspects and employee welfare, but ignore
economic and environmental aspects (El Hilali et al., 2020). Sustainability can be multi- and
trans-disciplinary, affecting socio-economic organizations through decisions, actions and
behaviors. Therefore, there are often cultural biases and conflicting attitudes in risk
perception, investment attitudes, and open-mindedness that result from sustainability
decision-making. Stakeholder engagement is highly influential for sustainability in creating
value (Guandalini, 2022).
Sustainability can be seen as a static or dynamic notion. The dynamic notion of
success shows the ecosystem's responsiveness to future possibilities that can be created by
sensing and predicting future possibilities, as well as internal and external changes. Static
ideas, on the other hand, describe developments to meet current needs without compromising
the future. Monitoring and feedback is how the system maintains the transformative stage to
be formed efficiently (Jeladze & Pata, 2018).
Sustainable development is a dynamic interaction between natural and social systems,
aiming to improve supply effectiveness, achieve equitable development, and promote
ecological civilization. Addressing social and economic issues such as environmental and
social justice is essential. Energy efficiency can reduce environmental impact, while
improved industrial structure promotes sustainable development. Blockchain technology,
which enables paperless, real-time, automated, and publicly verifiable transactions, improves
social equality by providing convenience to various economic entities, promoting sustainable
development. Overall, addressing these issues is critical to achieving sustainable development
(Ma et al., 2024).
Research Methods
The research method applied in the preparation of this scientific article uses the
literature review method. According to Burns & Groove in Brink & Walt (2009), literature
review is the process of searching, reading, understanding, and making conclusions on
published research results and theories and presenting them in an organized manner. We
obtained the research data from various international scientific journals and articles that have
been published online on official websites such as ScienceDirect, Scopus, EBSCOhost,
Emerald, and ProQuest which are recognized as relevant and reputable media since 2018
until now.
The process of obtaining data used to support the preparation of this research began
with the use of a search box with the keywords "digital transformation" and "sustainability"
within the boundaries of 2020 to 2024 where digital transformation is growing. In the first
stage of the data search, a total of 883 articles related to these two keywords were obtained.
Selection was then applied by taking into account the title, abstract and keywords in the
accessible articles until a total of 419 articles became the result of the second stage of the
selection process. Then, a more detailed selection of the literature review topics covering the
two main keywords was made, narrowing down the selection to 178 articles. In order to focus
on the fields of economics and finance that are the subject of research, the last stage of
selection resulted in a total of 16 articles to trigger the preparation of research that is expected
to bring results and conclusions that interpret digital transformation in business sustainability.
Results And Discussion
Digital capabilities enable the integration of business and information technology to
impact customer experience and operational processes. Therefore, digital transformation is a
key cornerstone in shepherding economic and financial development towards a sustainable
direction in this evolving digital era (Cheng et al., 2023). Along with the digital
transformation of companies to achieve sustainability of their business operations, the role of
efficient strategies aligned with the needs of contemporary society in the global agenda to
achieve Sustainable Development Goals (SDGs) as part of competitive advantage is growing.
However, digital transformation is a process that goes beyond technology; it is more related
to reacting in a timely manner to current challenges, building competitive digital capabilities
and adopting processes that will enable the company's leadership in the industry economy
(Quang, 2023).
Digital transformation has a strong economic impact, initiating new paradigms and
approaches to economic development (Nguyen & Nguyen, 2021). At the core of the "new
digital economy" are knowledge and knowledge-based solutions. Some popular approaches
to the "new economy" (both greener and more inclusive) in the digital era are the creative
economy (development of creative industries); network economy (transforming seller-buyer
relationships into supplier-user relationships using networks); social economy (based on
social business models); and platform economy (utilizing online platforms to provide
business cooperation). The digitalization era is now driving a business revolution in all areas
such as marketing, finance, financing, digital technology-based production because it can
have an impact on business management (Pînzaru et al., 2021).
According to research conducted by Spitsina et al. (2022), digital transformation is
currently one of the main engines of growth and technological development of the global
economy. The introduction of digital technologies contributes to the competitiveness of
various sectors of the world economy, the creation of new sectors of business opportunities in
terms of connecting to digital global value chains, the emergence of new markets and niches,
and the accelerated introduction of new digital goods into the global market (Bingnan et al.,
2023). The process of digitalization does not occur simultaneously in different countries
around the world, so there is a certain gap in the level of digitalization of national economies,
which creates a digital divide. The consequences can increase the country's dependence on
developed countries. Politics, legal norms, traditions and culture, the level of economic
development achieved, the level of education, and the country's own technological base, as
well as many other factors, play an important role in the digital transformation of a country's
economy.
Digital transformation is now a global trend in economic and social development, so it
is important to measure the impact of this trend on the economy and society in various
countries. Digitalization can be seen as an effective trend of global development only when
the digital transformation of information covers business, science, social fields, and daily life
citizens. Another requirement is that it is advisable to ensure the effective use of the results of
digitization, which will be available to users, in particular not only to specialists, but also to
ordinary citizens, so it is important to establish digital education and digital competence in
society. In this way, it can be said that digital transformation creates significant leaps in
operational efficiency that also require the use of emerging technologies to create new
markets for goods and services that were previously very difficult to measure and/or
exchange. This shift towards digitalization provides an opportunity for organizations to
ensure their competitiveness and sustainability, not only at the national level but also across
the globe. Governments have played an important role in the management of advanced
information technology and the achievement of business sustainability, and emphasized the
importance of government support in the adoption of sustainability. Overall, digital
transformation has the potential to influence organizational performance in terms of
sustainability, making it important to deepen the understanding of how digital innovation can
contribute to sustainability (Pham et al., 2023).
The emergence of digital ecosystems and technology-based financial platforms has
transformed traditional business models. Fintech and insurtech are clear examples where
technological innovation is changing the way financial services are delivered to consumers,
providing more efficient and affordable solutions (Guo et al., 2023) Digital transformation is
a topic of great interest in academic and practical circles, while sustainability practices are
widely recognized by the business world. In Spilbergs' (2023) research conducted in the
context of Central and Eastern European Union countries, digital transformation is considered
as one of the important enabling factors in sustainable development that contributes to overall
progress in society by improving information and services, including access to education and
access to finance.
Digitalization of the economy not only impacts industrial production and services, but
ensures efficiency and efficiency in the use of resources. It also significantly distorts
economic sectors and employment. The level of business readiness is assessed. The
digitization of the economy is the impetus for the formation of a new innovation ecosystem
and innovation culture. New sources of growth and transformation of traditional and non-
productive spheres ensure the development of the modern economy. However, the lack of
development of technological platforms, as well as the rather low digital literacy of the
population do not fully guarantee the economic growth and security of the country. At the
same time, the dual nature of the digital transformation of the economy creates mechanisms
to minimize these risks, which are based on the progressive opportunities provided by the
digitalization process. The duality of the process of digitization of the economy is manifested
in the creation of a qualitatively new labor force and the displacement of workers with
traditional skills and professions.
Existing literature has examined the influence of digital transformation in terms of
corporate productivity, organizational structure, organizational resilience, organizational
performance, and corporate innovation. Simultaneously, digitalization empowers corporate
innovation, thereby improving the organization's financial, operational, and environmental
performance, enhancing organizational resilience, and achieving sustainable development
goals (Zhang & Jin, 2023). In addition, digital transformation can foster a digital economy
that has several advantages over real commodity-money exchanges, such as the speed of
instant delivery of goods or delivery of services. In addition, the advantage of the digital
economy is the lower production and production costs of carrying out transactions. At the
same time, electronic goods are almost inexhaustible and still exist in virtual form, whereas
tangible goods are almost always limited in quantity and more difficult to access. Digitally
competitive economic actors are on the rise in modern manufacturing and are effective in the
real sector. However, practice shows that economic growth is not always sustainable as there
are still signs of growth bottlenecks in society, such as negative demographic trends that
reduce the positive impact of an increasing skilled labor force.
Business people need to transform conventional business activities towards modern
business. The era of digitalization 4.0 forms the transformation of information technology in
various aspects of business activities that help business people to run a business properly and
organized in order to compete and consistently maintain their business (Genkova, 2022).
Management skills are needed as an internal strategy so that businesses can consistently
survive to achieve growth. Management skills are one of the important factors for business
growth and low management skills can lead to business failure. Skills and knowledge of
financial management and financial digitalization are important for business people to master,
where this knowledge can be obtained through formal education or training. Digital finance
that provides benefits and easy access to financial products and services can have an impact
on MSME decisions to use them. The existence of digital finance can help manage business
finances in a systematic and organized manner in presenting financial reporting.
The adoption of digital tools to support business sustainability can lead to
organizational outcomes, improve project reuse rates, reduce product development costs,
reduce product costs, reduce regulatory compliance costs, stimulate competitive advantage by
engaging stakeholders, drive innovation, reduce operational costs, attract and retain staff,
improve risk management, build and maintain a good reputation, and position companies as
actors contributing to overall social sustainability (Pînzaru et al., 2022). Overall, Indonesia's
digital economic activity has room for improvement in all areas: reliable logistics and
infrastructure; seamless, secure and scalable payment opportunities; a professional and digital
commerce ecosystem consisting of Micro, Small and Medium Enterprises (MSMEs), a strong
talent pool and a healthy investment climate. The digital economy has also changed the
behavior of people dominated by the millennial generation in fulfilling their needs. The
fulfillment of needs through e-commerce platforms is increasingly aligned with payment
activities, giving rise to digital payment innovations.
The digitization of financial services is one of the biggest challenges of the last
decade, both in Indonesia and globally (Tlemsani, et al., 2023). The rapid development of
digital technology has undoubtedly created a favorable environment for significant advances
in the financial sector, especially the Global Financial Crisis (GFC). According to Alvars
research (2023) Digitalization of financial services provides an opportunity to significantly
increase the financial autonomy of citizens and organizations while increasing the operational
efficiency of these service providers. Technological developments create opportunities to
radically change financial services and delivery channels, as well as business models and
processes in the classical financial sector, opportunities for new business directions and
companies. However, the effective use of these opportunities is associated with many
limitations, including economic and financial, public sector and industry readiness levels,
individual digital financial literacy, public attitudes.
Global shocks, such as the GFC and pandemics, as experience shows, can provide
additional incentives for faster development and application of advanced technologies and
thus contribute to the achievement of UN Sustainability goals. In order to make effective use
of limited resources wherever possible it is necessary to evaluate and prioritize the factors
influencing the process and prepare and implement appropriate programs. In this context, it is
important to be aware of the wide range of studies and their main conclusions, as one study
will never provide comprehensive answers to all questions regarding digitalization and
sustainability are two important aspects, both in the context of individuals, companies, and
organizations and overall society, whose adequate perception and inclusion in development
programs can guarantee maximum effect in the long run.
Various solutions and positive experience stories are available, which can help to
successfully continue progress in the development and implementation of digital financial
services (Ma et al., 2023). As a result of With the development of technology, opportunities
have opened up for promising new business directions, including FinTech, and thus increased
competition, has contributed to the sustainable transformation of the financial sector. Digital
solutions allow successfully solving the problem of financial inclusion both in developed
countries and especially in countries with a low level of economic development and thus can
relatively develop the national economy faster. Research conducted by Spilbergs (2023) also
highlights some of the risks associated with digital transformation, thereby providing an
opportunity to learn from mistakes and avoid potential losses.
Over the past few decades, significant progress has been made in the development and
implementation of digital financial services in most countries of the world. Financial services
are largely interconnected and in developed societies there is demand for a wide variety of
them, which opens up opportunities for service providers to take advantage of cross-selling
and volume (Yaxin, 2023). It is important to be aware of the needs and habits of customer
groups and individuals so that financial service offerings and delivery channels meet
customer needs and preferences. And at the current stage of development, the most important
factor affecting the digital intensity of financial services in Indonesia is human resource
development followed by the integration of digital technology. Therefore, responsible
institutions should prioritize relevant measures to deal more effectively with the
implementation of sustainable digital services again (Chen et al., 2023). Digitalization is
associated with significant investment, but by successfully and far-sightedly solving the
challenges of digital transformation, financial services companies can reduce their relative
operating costs, both total and personnel costs.
Digital transformation in the banking sector has changed the legal order of national
banking with the presence of Digital Banks. Digital Bank is a bank that provides and carries
out business activities through electronic channels without physical offices other than the
head office. In addition to creating efficiency, Digital Bank offers innovative products and
services, and is able to create financial inclusion and potentially provide broad access for
MSME businesses. In addition to information technology, the main element in Digital Bank
activities is data. Therefore, strengthening and implementing regulations are keywords to
anticipate potential risks that are closely related to information technology and data
protection. Data leakage or misuse of data has the potential to cause risks including
operational risk, reputation risk, strategic risk and legal risk. Therefore, Digital Banks are
required to implement and translate information technology governance and risk management
into clearer guidelines. Strengthening regulations related to governance, risk management and
data protection is a fundamental need to accelerate the digital transformation of Indonesian
banking (Liu et al., 2023).
With the above explanation, digital transformation is the driver and forerunner of
sustainability. This explains why companies need to enhance their digital capabilities and
consider their economic, environmental and social impacts to survive the digital revolution,
meet market expectations and build a smart and inclusive society (Cheng et al., 2023). At the
firm level, the implementation of sustainability and digital transformation requires identifying
the current obligations needed to address structural transformation and the potential firm-
specific benefits that can arise from this transformation on the firm and its value chain (Diana
& Maria, et al., 2022). Incorporating sustainability and digitalization into a company's
strategy requires a structural transformation at the organizational level, in the new role that
the company must assume in the business ecosystem. This transformation requires a change
in strategy and even the business model. The introduction of entirely new business value
propositions requires a real commitment to sustainability (El Hilali et al., 2020). Regulatory
requirements mainly achieve this commitment; in addition, it must also face financial and
skills barriers and transform its model into an environmentally friendly business model.
Conclusions
Digital transformation plays a key role in driving economic and financial
development towards sustainability in the digital age. Its impact is not only limited to
technological aspects, but also affects business strategies and the overall economic paradigm.
Digital transformation is driving sustainability in various sectors. Integrating sustainability
and digitalization in corporate strategy requires structural transformation, commitment, and
solving financial and skills challenges. Digital innovation has the potential to positively
impact organizational performance and promote sustainable economic and financial growth.
In the context of the global economy, digital transformation is having a strong
economic impact, initiating a new paradigm in economic development. While there are
significant benefits such as economic growth and new business opportunities, digital
transformation also creates a digital divide between countries and poses certain risks.
However, the success of this transformation depends on the integration of sustainability into
business strategy and the implementation of supportive regulations. Therefore, companies
need to consider factors such as digital literacy, digital finance and risk management to
achieve sustainability in this digital age. Digital transformation is not only a global trend, but
also a necessity to maintain competitiveness, sustainability, and a positive impact on society
as a whole.
