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Does every cloud have a silver lining?The effect of digitalization and government measures on bank efficiency during the pandemic

Naima Lassoued et al.

Financial Innovation2026https://doi.org/10.1186/s40854-025-00882-warticle
AJG 2ABDC B
Weight
0.37

Abstract

During the COVID-19 crisis, MENA banks have supported the economy by addressing liquidity needs and maintaining activity through digitalization, whereas governments and central banks have implemented supportive measures. This study highlights the unique challenges and opportunities for banking efficiency in the MENA region. Specifically, it aims to investigate the impact of the COVID-19 crisis on the technical efficiency of banks in the MENA region, taking into account the role of digitalization and government measures. Using data envelopment analysis (DEA) and Tobit regression, 134 banks in 11 MENA countries from 2017-2021 were analyzed. This methodology provides a thorough assessment of the pandemic’s impact and the roles of digitalization and government measures. The findings show that the COVID-19 pandemic had a negative effect on the technical efficiency of banks in the MENA region, leading to both pure technical inefficiency (suboptimal input utilization) and scale inefficiency (misaligned returns to scale). Moreover, digital tools mitigate the pandemic’s negative effects by improving pure technical efficiency. In contrast, economic government measures amplify the negative impact of COVID-19 by reducing scale efficiency. These results highlight the role of digital technologies as crisis safeguards and the nuanced effects of government intervention. These findings have significant implications for banks, policymakers, and regulators in the MENA region. Banks highlight the necessity of investing in digital technologies and capabilities to increase their technical efficiency. Policymakers and regulators should also prioritize initiatives that promote digital adoption in the banking sector while providing a conducive regulatory environment. Additionally, government interventions should carefully implement economic measures during crises to avoid negative consequences for banks’ scale efficiency. This study fills a crucial gap in the literature by examining the unique impact of the COVID-19 pandemic on bank efficiency in the MENA region, whereas previous studies focused on performance. Its novelty lies in its comprehensive analysis of both the detrimental effects of the pandemic and the roles of digitalization and government measures, shedding light on the complex dynamics among crises, technological disruptions, and policy responses that shape banking sector resilience.

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https://doi.org/https://doi.org/10.1186/s40854-025-00882-w

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@article{naima2026,
  title        = {{Does every cloud have a silver lining?The effect of digitalization and government measures on bank efficiency during the pandemic}},
  author       = {Naima Lassoued et al.},
  journal      = {Financial Innovation},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1186/s40854-025-00882-w},
}

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Does every cloud have a silver lining?The effect of digitalization and government measures on bank efficiency during the pandemic

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.