Short communication: 2025 Vol: 29 Issue: 1S
Carlos Rivera, Universidad de Buenos Aires
Citation Information: Rivera, C. (2025). Digital transformation in global finance: How technology is shaping the financial landscape. Academy of Accounting and Financial Studies Journal, 29(S1), 1-3.
Digital transformation is rapidly reshaping the global finance landscape, affecting everything from banking and payments to investments and regulatory compliance. Innovations like artificial intelligence, blockchain, and cloud computing are revolutionizing traditional financial processes, creating efficiencies, improving customer experiences, and enhancing security. However, this transformation also brings new challenges, such as cybersecurity risks, regulatory concerns, and the need for digital literacy among stakeholders. This article explores the drivers, applications, and impacts of digital transformation in finance, highlighting its potential to create a more efficient, inclusive, and resilient financial ecosystem
Digital Transformation, Global Finance, Financial Technology, AI in Finance, Blockchain, Cloud Computing.
Digital transformation is redefining the global financial landscape, with technology increasingly at the centre of financial services and operations. From enhancing transaction speed to improving data security, digital transformation has brought both efficiency and complexity to global finance. As we explore the drivers behind this shift, it becomes clear that the integration of technology into financial processes is both an opportunity and a challenge for businesses, consumers, and regulators alike.
One of the primary drivers of digital transformation in finance is the rise of financial technology, or finch. Fintech companies are leveraging advanced technologies to provide innovative financial services, such as mobile banking, online lending, and robo-advisory. These innovations are not only improving accessibility but are also challenging traditional financial institutions to adopt new, tech-driven business models to stay competitive in a rapidly evolving market ( Belozyorov et al., 2020).
Artificial intelligence (AI) and machine learning have had a profound impact on global finance, allowing for automation, predictive analytics, and enhanced decision-making. Financial institutions are now using AI to improve customer service through chatbots, manage risks, and optimize investment strategies. Machine learning models can analyze vast amounts of data, detecting fraud patterns and predicting credit risk, enabling more informed and timely financial decisions ( Wang & Kievich 2024).
Blockchain technology and cryptocurrencies are other key components of digital transformation in finance. Blockchain enables secure, transparent, and decentralized transactions, reducing the need for intermediaries and lowering transaction costs. Cryptocurrencies like Bitcoin and Ethereum offer alternatives to traditional currency systems, allowing users to conduct transactions across borders with minimal fees. However, the volatility and regulatory uncertainty surrounding cryptocurrencies continue to pose challenges for widespread adoption ( Omarini, 2017).
Cloud computing has enabled financial institutions to store and process data on a large scale, facilitating innovation and collaboration across regions. Cloud services allow banks and other financial entities to scale their operations, improve efficiency, and reduce costs by outsourcing infrastructure and focusing on core business activities. Moreover, cloud computing supports data analytics and AI capabilities, providing real-time insights that are critical for decision-making in finance.
Digital transformation has also significantly enhanced customer experiences in finance. Online banking, mobile apps, and personalized financial services offer convenience and flexibility, allowing customers to manage their finances at any time and from anywhere. With data analytics, financial institutions can provide customized offerings based on individual customer needs, fostering a more customer-centric approach to finance ( Rostek, 2022).
With the digital transformation of finance comes an increased risk of cybersecurity threats. As financial institutions adopt digital solutions, they also become more vulnerable to cyberattacks. Data breaches, fraud, and hacking pose significant risks to customer data and financial stability. Consequently, cybersecurity has become a top priority for financial institutions, with investments in robust security measures and regulatory frameworks aimed at protecting digital financial ecosystems ( Hung & Trung, 2024).
As finance becomes more digital, regulatory compliance has grown increasingly complex. Regulatory bodies around the world are working to keep pace with technological advancements, creating new frameworks to address issues such as data privacy, money laundering, and consumer protection. Regulations like the General Data Protection Regulation (GDPR) in the EU and the Payment Services Directive 2 (PSD2) emphasize transparency and security, compelling financial institutions to prioritize regulatory compliance as they adopt digital solutions ( Guo et al., 2018).
Digital transformation holds significant potential for improving financial inclusion. Technologies like mobile banking and digital wallets have enabled individuals in underserved regions to access financial services that were previously out of reach. By reducing geographical and economic barriers, digital finance has the potential to promote inclusivity, empowering individuals and businesses in developing countries to participate in the global economy ( George, 2024).
Big data analytics is another critical component of digital transformation in finance. Financial institutions now have access to vast amounts of data, which can be analyzed to gain insights into customer behavior, market trends, and risk factors ( Elsa & Halil, 2024). Data-driven decision-making enables financial institutions to enhance predictive capabilities, identify new revenue streams, and better understand customer needs, ultimately improving both operational efficiency and customer satisfaction ( Feyen et al.,, 2023.
Digital transformation is reshaping the global financial landscape, driving innovation, efficiency, and inclusivity in finance. Technologies like AI, blockchain, and cloud computing are creating new opportunities for financial institutions and enhancing customer experiences, while also presenting challenges such as cybersecurity risks and regulatory compliance. As digital finance continues to evolve, collaboration among financial institutions, technology providers, and regulators will be crucial to building a secure and resilient financial system. By embracing digital transformation with a balanced approach, the global finance industry can unlock its full potential and foster a more equitable, efficient, and sustainable financial ecosystem.
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