Digital transformation has profoundly reshaped the banking sector, driven by increasing competitive pressure, regulatory demands, and rising customer expectations. In response, banks have increasingly adopted digital process innovation (DPI) and Business Process Management (BPM) as strategic approaches to improve efficiency, value creation, and organizational adaptability. However, prior research has predominantly examined digital transformation from a technological or efficiency-oriented perspective, leaving the sociotechnical implications for strategic decision-making and organizational development underexplored. In particular, limited empirical attention has been given to how managers and tactical personnel experience and navigate BPM-driven digitalization in highly regulated and tradition-bound contexts such as banking.

This study aims to deepen the understanding of how digital process innovation influences organizational development in the banking sector, with specific focus on how strategic and tactical decision-making is experienced by managers and operational leaders. Drawing on sociotechnical theories, including affordances and constraints, imbrications, interdependence, legacy habits, and digital enactment - the study conceptualizes digital transformation as a dynamic process shaped by the ongoing interaction between human agency, digital technologies, and organizational structures. Empirically, the study adopts a qualitative study approach conducted at a Nordic bank. Data were collected through semi-structured, in-depth interviews with six respondents holding leadership and tactical roles across different organizational functions. The interview data were analyzed using thematic analysis, guided by a deductive conceptual framework complemented by inductively derived themes.

The findings indicate that BPM-driven digitalization significantly reshapes strategic decision-making by altering information flows, redistributing responsibilities, and redefinding managerial roles. Digital technologies simultaneously enable new affordances - such as enhanced transparency, automation, and data-driven insights - while introducing constraints related to reduced flexibility, legacy routines, and dependency on algorithmic systems. Managers actively engage in digital enactment by interpreting, adapting and sometimes resisting digital solutions to align them with organizational goals and existing practices.

The study contributes to information systems research by providing empirical insights into the sociotechnical dynamics of digital process innovation in banking. It highlights the importance of considering human experiences, organizational learning, and legacy practices when designing and executing BPM-driven digital transformation strategies.