Homa Soufi - Ph.D. Candidate, Allameh Tabataba'i University, Tehran, Iran,
Habib Roodsaz - Associate Professor, Allameh Tabataba'i University, Tehran, Iran

This article explores digital transformation's pivotal role in reshaping the banking sector within the broader smart economy context. It discusses the stages of digitization and digitalization, highlighting banks' strategic importance in this evolution. The emergence of the smart economy is examined, driven by digital transformation's far-reaching effects. The article emphasizes historical tech adoption in banking and ensuing challenges, such as cultural resistance, talent gaps, data security, and regulatory compliance. It underscores the need for customer-centricity, modernized infrastructure, data analytics, and adaptation to a digitally-driven market. The article analyzes digitalization's impact on bank performance, including enhanced profitability, operational efficiency, and financial inclusion. It concludes that a strategic alignment of technology, customer expectations, and industry trends is crucial for successful digital transformation in the banking sector.

Smart Economy; Digital Transformation; Digital Banking; Banking