The digital transformation in the banking sector, accelerated by the COVID-19 pandemic, has underscored the critical role of technological innovation and cybersecurity in driving financial performance. As banks increasingly adopt digital services to meet evolving customer demands, the associated risks, particularly cyber threats, have intensified, making cybersecurity a vital factor in maintaining both data protection and customer trust. This study explores the role of cybersecurity as a mediator that enhances the impact of technological innovation on stock returns in the banking sector, specifically across three phases: before, during, and after the pandemic. By developing a conceptual model, this research contributes to the Resource-Based View (RBV) and contingency theory, proposing that cybersecurity investments amplify the financial benefits of technological innovations by safeguarding against disruptions and reinforcing the bank’s competitive edge. The study also outlines a methodological framework for future empirical validation, recommending the use of secondary data from financial and cybersecurity databases and suggesting path analysis and Structural Equation Modeling (SEM) to examine complex relationships. Findings from this study highlight practical implications for banking executives and policymakers, emphasizing the strategic alignment of cybersecurity with technological advancements as a way to enhance stock returns and ensure sector resilience. This research provides foundational insights that can guide future studies and regulatory frameworks, supporting a balanced approach to innovation and security in the evolving digital landscape.