Received 02.05.2025, Revised 13.08.2025, Accepted 30.09.2025

Digital banking services: History, benefits and challenges

Ragib Mammadli

Innovation and technological advancements are transforming every sector of the economy, and studying their impact on the banking sector is highly relevant in the context of digitalisation. The rapid evolution of technologies has led to major changes in the way banking services are delivered, reshaping the expectations and behaviour of both customers and financial institutions. One of the most notable innovations emerging from technological advances is digital banking services. The purpose of this article was to examine the concept of digital banking services by analysing their history, types, benefits and challenges, and to contribute to the academic literature by providing a comprehensive overview of how they are transforming the modern banking environment. To achieve the set goals, qualitative analysis, generalisation, and systematisation methods were used. This study revealed that applying the latest innovative technologies to traditional banking services digitises and automates them, improves their accessibility, makes them more convenient for customers, increases transparency and efficiency, and reduces costs for both banks and customers. However, in addition to their countless benefits, digital services also come with many challenges, such as privacy, security, and technical issues. The study highlighted the importance of banks and financial institutions addressing these challenges, as failure to do so could undermine trust in digital systems. Furthermore, regulatory bodies should take measures on digital services to ensure financial stability, avoid illegal activities, protect customers and banks from security issues, and prevent unwanted risks and problems for the whole financial sector. The demographic analysis part of the study explored the number of digital banking users worldwide and the factors influencing their adoption of digital services. The findings of this study can be used as a guide by banks and financial institutions in implementing innovative technologies

innovation; accessibility; customer behaviour; financial inclusion; regulation
8-17
Mammadli, R. (2025). Digital banking services: History, benefits and challenges. Innovation and Sustainability, 5(3), 8-17. https://doi.org/10.31649/vis/3.2025.08

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