International Journal of Economics and Business Administration

Practical Implications: The results of the study can be applied in the development of the 
legislative regulation of the FinTech industry in Russia. 
Originality/Value: The main contribution of this study is to determine the prospects for the 
development of the domestic banking sector in the context of digitalization, the need to 
transform in order not only to improve the competitiveness and efficiency of functioning, but 
also to stay in the banking business. 
 
Keywords: FinTech, transformation of the banking sector, digitalization of the banking sector, 
digital ecosystem, big data, blockchain technology. 
JEL codes: G21,E50, O31. 
 
Paper type: Research article: Digital Banking. 
1
Professor of the Department of Economics, 
North Ossetia State University, Vladikavkaz 
[e-mail]
 
 
2
Associate Professor, Head of the Department of Information Systems in Economics, Institute 
of Applied Information Technologies, Grozny State Oil Technical University named after 
acad. M.D. Millionschikova, Grozny, 
[e-mail]
  

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The Transformation of Traditional Banking Activity in Digital 

 
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1. Introduction 
One of the main factors for the growth of the modern economy is the development of 
digital technologies in the financial market. Digitalization covers both separate and 
complex sectors, resulting in significant savings of the human resources and all costs 
connected with them, which improves competition. Nowadays, the financial system 
in general and the banking sector in particular, are developing in accordance with the 
modern requirements of the digital economics. Due to the digital transformation, 
business models and concepts for the banking sector’s development are being 
improved.
The process of digital transformation is considered as the use of digital technologies 
to improve business models, as well as to improve their efficiency. This process 
involves the introduction of innovative technologies on an ongoing basis, which will 
lead to a full digital transformation of the entire economy (Ablyazov and Asaul, 2018). 
The use of digital technologies improves the ways of interaction between banks, 
government and potential customers (Thalassinos and Thalassinos, 2018). Digital 
transformation involves the widespread introduction of modern ways of providing 
banking services. The number of bank branches is decreasing, and many services are 
being transferred online, especially when lending or investing funds (Piirainen, 2016). 
The innovative development is the main opportunity for sustainable and long-term 
growth in the efficiency of banks. Today, digitalization has become a strategic priority 
for the banking industry in the world. The driver of the changes taking place in the 
banking sector are modern financial technologies (Rupeika-Apoga et al., 2018).