Title: Paradox of consumer protection in platform development and digital banking performance

Authors: Anto Prabowo; Wimboh Santoso; Djoko Suhardjanto; Irwan Trinugroho

Addresses: Indonesia Financial Services Authority (OJK), Jakarta, 10270, Indonesia ' Universitas Sebelas Maret, Surakarta, 57126, Indonesia ' Universitas Sebelas Maret, Surakarta, 57126, Indonesia ' Center for Fintech and Banking, Universitas Sebelas Maret, Surakarta, 57126, Indonesia

Abstract: This study examines the effect of bank size on digital performance through the mediating roles of consumer protection and platform development, and explores the interaction between these mediators. Using primary and secondary data from 87 Indonesian commercial banks offering digital services, consumer protection was measured via survey responses, while financial and digital indicators were obtained from official reports and app statistics. Data were analysed using covariance-based structural equation modelling. Results indicate that bank size positively affects both consumer protection and platform development, which in turn positively influence digital performance. However, consumer protection negatively affects platform development, creating a paradox. The findings reveal that while consumer protection directly enhances digital performance, it indirectly diminishes it through platform development. The indirect positive effect of bank size on digital performance is stronger via platform development than via consumer protection due to this paradoxical interaction.

Keywords: banking; bank size; consumer protection; platform development; digital performance.

DOI: 10.1504/IJMEF.2025.150830

International Journal of Monetary Economics and Finance, 2025 Vol.18 No.6, pp.480 - 501

Received: 27 Feb 2024
Accepted: 09 Mar 2024
Published online: 23 Dec 2025 *

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