A B S T R A C T

The purpose of the research - the aim of the research is to analyze the main challenges encountered in the transition from the existing traditional banking model to a digital banking model in both the global context and in Azerbaijan, and to investigate possible solutions to these challenges.

The methodology of the research – various research approaches have been employed to ensure a deep and effective analysis of the implementation of digital banking services.

The practical importance of the research – this paper explores the management possibilities of transitioning from traditional to digital banking and provides both theoretical and practical insights aimed at enhancing efficiency, promoting innovation, offering innovative solutions, and achieving sustainable development goals.

The results of the research – by examining the problems and opportunities arising during the transition from traditional banking to digital banking, the study offers theoretical and practical recommendations for improving banking efficiency, introducing innovative solutions, and reaching sustainable development targets.

The originality and scientific novelty of the research – the study systematically explores the challenges and opportunities of the digital banking transition within the context of Azerbaijan’s specific realities and presents innovative solutions accordingly.

Keywords: traditional banking, digital bank, digital transformation, blockchain, digital identification system.