Digitalization as a transformation in the business environment of traditional banks

Abstract

The process of digital transformation has an impact on every aspect of human society. In finance, the digital revolution is reforming how customers approach financial products and services. In the recent period, the increasing interaction between technology and finance has reconfigured the financial industry, a far-reaching phenomenon that has been coined to define Fintech (Financial-Technology). The emergence of innovative technology platforms is thus challenging financial markets through various channels and modes. In a market previously controlled only by conventional banks, new Fintech players are now successfully carving out a niche for themselves. From shopping to banking, customer expectations have risen to a level that the conventional banking system cannot meet. Fintech firms are using technology to support financial transactions between companies and consumers. It is necessary to understand how these digital players can be so successful with their cutting-edge goods and services due to the level of digitalization that Fintech companies have obtained from the major players in the banking industry. This essay aims to explain how digitization processes are taking hold in the banking industry and how it is changing by presenting the findings of an analysis of the transformations affecting the Italian banking sector.