Digitization of Financial Services - A review of risks and Challenges

Abstract

The digitization of financial services has emerged as a fundamental force in reshaping how transactions and financial services are conducted, fundamentally altering the landscape of the banking and financial sector. This transformation is driven by a combination of technological advancements and evolving consumer expectations, which together demand improved efficiency, accessibility, and customer experience. Traditionally, banking practices were marked by cumbersome manual processes, limited access to services, and reliance on physical branches. The introduction of computers at the end of the twentieth century was the first significant step toward automation in the financial sector, paving the way for subsequent innovations such as online banking, automated teller machines (ATMs), and, more recently, mobile payment applications. This paper provides insights into the various risks and challenges associated with digitization through literature review.