The objective of this comprehensive review is to examine the intricate relationships among operational efficiency, financial innovation, and digital transformation in the banking sector. Through a systematic literature review spanning from 2000 to 2024, this study synthesizes diverse findings from global scholars. Key findings highlight the interconnectivity of these elements, with AIS adoption improving operational efficiency through data accuracy and timely decision-making. The impact of financial innovation on banking performance is contingent upon regulatory dynamics, emphasizing adaptive strategies. Digital solutions such as big data analytics and blockchain drive socioeconomic progress, bridging gaps in wealth management. Challenges include navigating legacy systems, privacy concerns, and innovation-related risks. Theoretical implications suggest that financial institutions must strategically adopt digital technologies, considering regulatory dynamics and fostering innovation. Robust AIS systems optimize processes, while digital lean operations enhance efficiency. Leveraging digital solutions requires careful consideration of data quality, privacy, and ethical use. The study's importance lies in providing adaptive strategies necessary to manage risks and embrace opportunities in the evolving financial landscape. Ultimately, this study establishes a comprehensive framework for understanding the intricate dynamics of operational efficiency, financial innovation, and digital transformation in modern banking, offering valuable guidance for financial institutions navigating the complexities of the digital era.
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