DIGITAL TRANSFORMATION OF TECHNOLOGY PROCUREMENT IN THE BANKING SECTOR: IMPLICATIONS FOR STRATEGIC SOURCING, SUPPLIER GOVERNANCE AND PROCUREMENT PERFORMANCE

Abstract

The banking industry is undergoing a paradigm shift in technology procurement, fueled by regulatory pressures, technological advancements, and strategic considerations for third-party risk management. This paper investigates the impact of digital transformation on strategic sourcing, supplier governance, procurement performance using a qualitative approach of multiple case studies. This research focuses on analysis of seven financial institutions under varied geographic contexts such as QNB, AIB, Westpac, Huaxia Bank, Varo Bank, Santander UK and Bank of Uganda and identifies three main themes; the shift of procurement from an administrative function to a value driver of the business, the imperative need for tools and systems that enable effective supplier governance and regulatory compliance through AI and the importance of human factors such as change management, workforce upskilling and cultural integration in realizing procurement performance benefits. The results show that the key to a successful digital banking procurement is to invest in the technology infrastructure, redesign the processes, and build up the capability of the organisation. This study adds to the literature on procurement digitalization as empirical data in the highly-regulated banking environment and provides practical takeaways to procurement leaders embarking on their own digitalization journey.