Analysis of Indonesia's Commercial Bank Industry Performance in the Era of Digital Banking 4.0 (Panzar-Rosse Model Approach)

Technological advances in the banking industry
have disrupted all industries, including the
banking industry. This has brought commercial
banks in Indonesia towards the digital era 4.0,
which has led to a shift in people's behavior in
transactions and has led to many digital
financial institutions. It is feared that these
changes will have an impact on the performance
of commercial banks in Indonesia and change
the level of competition between commercial
bank institutions in the era of digital banking
4.0. This study aims to analyze the performance
of the Indonesian commercial bank industry in
the era of digital banking 4.0. The approach
used to measure the level of influence of
independent variables on the performance and
level of competition of commercial banks in this
study is the Panzar-Rosse non-structural
approach using secondary data from commercial
banks in Indonesia in the period January 2013-
March 2020. The object of this study is all
commercial banks conventional. Estimation of
the equation uses return on asset (ROA) as the
dependent variable for commercial bank
performance, and variable loan to deposit
(LDR), volume of e-money transactions,
number of electronic data capture (EDC)
machines, number of branch offices, number of
automated teller machine (ATM) machines,
operating expenses operating income (BOPO)
and net interest margin (NIM) as independent
variables. The results showed that the
performance of the Indonesian commercial bank
industry in the digital banking era 4.0 as
measured by ROA was significant effect by the
number of EDC machines, number of branch
offices, number of ATM machines, BOPO and NIM. However, LDR and volume of e-money
transactions do not have a significant effect on
ROA. Furthermore, based on the Panzar-Rosse
model using H-statistics, it shows that the
competition that occurred in commercial banks
in Indonesia in the era of digital banking 4.0
was included in a monopolistic market structure.