Abstract
This study focuses on assessing the impact of digital transformation on financial efficiency in the banking sector, with an emphasis on ROA (Return on Assets) and ROE (Return on Equity). The results confirm that the level of digital innovation implementation significantly affects financial indicators, revealing a profitability paradox. In a highly competitive environment with limited infrastructure resources, banks are compelled to actively adopt digital technologies. While this enhances operational efficiency, it also poses challenges to overall profitability. Digital transformation requires substantial investments in technological infrastructure and personnel training. Despite improvements in operational efficiency and customer service quality, the study indicates that these innovations can exert pressure on bank profitability, especially in the short term. A hypothesis is proposed regarding the positive impact of digital transformation on banking efficiency. Long-term benefits may include reduced operational costs, enhanced data security, and improved customer experience. However, banks face obstacles such as regulatory issues, cyber threats, and the need for continuous technological updates. Thus, digital transformation represents a dual challenge: the necessity for significant short-term investments and adaptation, but potentially substantial long-term benefits. Keywords: Banking Sector, Digital Transformation, Financial Efficiency, ROA (Return on Assets), ROE (Return on Equity), Profit Growth