Digitalization has profoundly transformed the Indian banking sector, moving it from traditional, paper-based branch operations to a dynamic, technology-driven ecosystem. This literature review synthesizes research on the multifaceted impacts, key drivers, benefits and persistent challenges of this digital revolution primarily drawing from academic sources and industry reports. The arrival of digitalization in the Indian banking sector has caused a fundamental shift in how financial activities are carried out. Fueled by increased internet access, widespread smartphone uses and government push for a cashless society, the financial landscape has moved away from traditional branch-based banking toward a more technologically-focused system. The move has influenced everything from how banks operate to how consumers handle their money.

This transition has not been a simple process but a profound transformation impacting efficiency, access and security. For banks automation and data analysis have improved internal processes while for customers services have become available at any time and from any location. This shift also extends to societal changes as digital platforms have brought financial services to many who were previously excluded from the formal banking system. Alongside these advances, new challenges have emerged including cybersecurity threats and a gap in digital literacy between urban and rural areas.