Financial Innovation and Digital Technology in the Banking System: An Institutional Perspective

Abstract

The emergence of digital technologies has significantly impacted the global banking system, leading to the development of innovative financial products and services. This article provides an overview of the impact of digital financial technologies on the banking systems of developed and developing countries. Through case studies, the article examines the adoption of mobile banking, blockchain technology, and robo-advisors by various banks around the world, highlighting the benefits and risks associated with each innovation. The research suggests that while these technologies have led to greater efficiency and access to financial services, they also pose challenges such as data security and privacy concerns. The article concludes that the adoption of digital financial technologies is crucial for developing countries to remain competitive in the global interregional banking markets. This can be achieved through the implementation of supportive regulatory frameworks, investment in infrastructure, and capacity building to enhance digital literacy and skills.