Digitalization Indicators and the Structural Transformation of the Banking Sector: Evidence from the European Union

Abstract

This paper investigates whether selected digitalization indicators reflect the structural transformation of the banking sector in the European Union. The analysis is based on four complementary dimensions: the share of individuals using internet banking, the number of secure internet servers, the Digital Economy and Society Index (DESI), and the cybersecurity index. Methodologically, the study relies on a comparative longitudinal approach using country-level evidence for EU member states over partially overlapping periods determined by data availability. The findings show that digital banking transformation in the EU is strong, cumulative, and structurally relevant, but uneven across member states. Northern and Western countries display mature digital banking ecosystems, characterized by widespread online banking adoption, robust digital infrastructures, higher digital readiness, and stronger cybersecurity capabilities. By contrast, several Southern and Eastern member states continue to face persistent structural barriers linked to weaker digital infrastructure, lower digital skills, reduced trust in online services, and slower institutional adaptation. The paper argues that banking digitalization should be interpreted not only as technological modernization, but also as a broader restructuring of customer interaction, service delivery, operational models, and risk management. The study concludes that digital convergence in EU banking remains incomplete and requires coordinated action in infrastructure, digital literacy, financial education, and cyber resilience. UDC: [336.71:061.1EU]:[004.056.5+004.78]; JEL: G21, O33, O52, C23