The Impact of Digital Transformation on Traditional Banking Systems and Their Adaptation to the Latest Technologies

Abstract

The article examines the areas of implementation of digital technologies in the banking sector, identifies individual digital banks and analyses the prospects for their development. The article outlines the scope and diversity of digital transformation in the banking industry, particularly its importance for optimising banking processes. The main advantages and challenges associated with transitioning traditional banks to the digital format are considered, considering the impact of this process on both banking institutions and their customers. It is established that the digital transformation of the banking system provides significant benefits but requires careful consideration of technical and security issues to increase customer comfort and trust.

The study's purpose is to identify the priority areas for digital transformation of the banking system and its adaptation to the latest technologies.

The research used systematisation, analysis, modelling, and comparison methods.

The study's results show that digital transformation and changing customer requirements for financial service efficiency pose significant challenges to traditional banking business models.

It has been determined that to effectively implement innovative strategies to increase customer loyalty, modern banking institutions are changing their structure, transforming from traditional financial institutions into digital organisations. The article develops recommendations for optimising the transformation process of traditional banking systems with due regard for adaptation to the latest technologies, which will help maintain the competitive advantages of banks in the context of active digitalisation of the financial sector.

The conclusions highlight the prospects of digital transformation of Ukraine's banking system. The article forecasts an increase in the volume of digitalisation of business processes in classical banking institutions, which will contribute to a significant reduction in their costs as market-economy entities.