Digital Channels as Sustaining Innovation: An Analysis of the True Drivers of Transformation in Traditional Banking

Abstract

This paper is put in the big background where traditional banks are facing low interest rates, tight rules, and competition from foreign banks after the world financial crisis; the aim is to look deep into the real reasons why banks develop digital ways and to make clear if these ways are really new or not. By looking at past research papers and real examples from banks in many countries, the study finds that digital channels are basically just gradual improvements instead of big changes that shake things up; the main goal of banks changing how they work is to make their old business steps better and to keep their role as money middlemen even stronger. The results show that pressure from outside rules and market competition, plus the need to control risks inside and to work more efficiently, all push this change together; this change makes banks better at bouncing back from big economic hits by changing how they do business and getting people and computers to work together, and this conclusion fixes the wrong idea that new tech always shakes things up, giving a theory base for bank managers to make plans and for rule makers to keep a balance between new things and safety.