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<p>Bank digital transformation has become a critical dimension for assessing banks’ competitiveness, yet the complexity and long-term nature of transformation creates tension with capital markets’ expectations for immediate results. This raises an important question: does retail investor attention to digital issues through online platforms prompt banks to accelerate substantive digital investment, or does it induce management to engage in strategic discursive responses? In the banking setting, such a discursive response can take the form of digital washing, a gap in which a bank’s disclosure about digital transformation outpaces its actual digital capability. Using panel data from Chinese A-share listed banks from 2016 to 2024, we find that retail investor online voice is significantly associated with greater digital washing, suggesting that public opinion pressure may trigger strategic disclosure behavior rather than genuine transformation efforts. This effect is more pronounced in state-owned banks and regional banks, reflecting the interplay between policy compliance pressure and governance complexity, as well as resource constraints facing smaller institutions. Notably, analyst attention and institutional investor ownership effectively mitigate this relationship, underscoring the importance of professional information intermediaries and institutional shareholders in constraining opportunistic disclosure. These findings contribute to understanding investor relations management in the digital era and provide implications for improving bank information disclosure regulation and investor protection.</p>

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All talk, no walk: how retail investor voice triggers bank digital washing

  • 期刊论文

  • 发表日期：

    2026年7月29日

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  • Lin Zhang,
  • Xue Lei,
  • Kunjian Zhao,
  • Shanshan Yue

摘要

Bank digital transformation has become a critical dimension for assessing banks’ competitiveness, yet the complexity and long-term nature of transformation creates tension with capital markets’ expectations for immediate results. This raises an important question: does retail investor attention to digital issues through online platforms prompt banks to accelerate substantive digital investment, or does it induce management to engage in strategic discursive responses? In the banking setting, such a discursive response can take the form of digital washing, a gap in which a bank’s disclosure about digital transformation outpaces its actual digital capability. Using panel data from Chinese A-share listed banks from 2016 to 2024, we find that retail investor online voice is significantly associated with greater digital washing, suggesting that public opinion pressure may trigger strategic disclosure behavior rather than genuine transformation efforts. This effect is more pronounced in state-owned banks and regional banks, reflecting the interplay between policy compliance pressure and governance complexity, as well as resource constraints facing smaller institutions. Notably, analyst attention and institutional investor ownership effectively mitigate this relationship, underscoring the importance of professional information intermediaries and institutional shareholders in constraining opportunistic disclosure. These findings contribute to understanding investor relations management in the digital era and provide implications for improving bank information disclosure regulation and investor protection.