Chapter 2: Role of Digital Technology in the Financial Industry

The management, investment and exchange of funds are being transformed by digital technology, driving a technological revolution in the financial sector. The proliferation of digital technology has given rise to the emergence of “financial technology,” an umbrella term for cuttingedge digital finance solutions. Digital technology has enabled the transition from physical bank branches to online banking, granting clients convenient access to their financial transactions through mobile banking applications, electronic payment methods and digital wallets. Digital finance research and development (R&D) has yielded regulatory technology solutions that automate compliance processes, improve the accuracy of regulatory reporting and address concerns related to data privacy. Digital finance places significant emphasis on cybersecurity and risk management. Ongoing research endeavors aim to advance cybersecurity safeguards, threat detection systems and data protection procedures. Collaboration is of the utmost importance in the digital finance ecosystem, encompassing end users, banks, FinTech firms and programmers, in order to foster innovation and satisfy the financial needs of customers effectively. The increasing significance of international payments has prompted the digital banking industry to collaborate with neighboring countries, striving to streamline and reduce the expenses associated with cross-border transactions.