What is Digital Banking? Simply put, digital banking means the complete digitization of a bank and all its activities, programs, and functions. It should be noted that the concept of digital banking expands beyond the front-end that customers see and perceive: services and products. Digital banking is largely about automating the processes that happen “under the hood” (back-end) and connecting these two sides with middleware. Digital banking means a full transition to a digital environment, which applies to both customers and employees (Wewege, 2017, p. 56). This new kind of banking takes advantage of innovations in the fields of big data and analytics. A bank that launched a working online or mobile banking platform cannot qualify for the digital “status,” unless it has automated each step of the customer-bank relationship. A digital bank optimizes and automates all the functions that it has: starting from product development and ending with end-user service. There is a clear distinction between digital and online banking and traditional banking. The latter typically requires customers to visit a physical location such as an office or an outlet. Traditional banking relies on routine manual actions and face-to-face interactions. The difference between digital banking and online banking may not be as apparent as in the first case. Online banking implies that many activities are available online, or in other words, the front-end is digitized (Wewege, 2017, p. 78). However, if one takes a look behind the scenes, one will discover that many of the back-end processes are still done manually and are not much different from those at traditional banks. It is likely that digital banking will be taking up larger shares of the industry as customers’ expectations evolve, big companies invest resources in digitization, and new entrants show a disruptive potential. Major Characteristics of Digital Banks   * Automation and digitization. As mentioned in the previous section, one single feature that distinguishes digital banks from other types of banks is their reliance on innovative technologies. Digital banks automate both front-end, i.e. functions and interfaces that customers get to see, and back-end processes.   * The use of big data and artificial intelligence (AI). Big data and artificial intelligence (AI) are two forces to be reckoned with in the modern banking industry. With the vast amounts of data available from mobile devices, digital banks can refine their fraud detection mechanisms and tailor the user experience to meet the most diverse needs.   * The lack of actual physical locations. Digital banking means that customers can make all the necessary operations from their smart device: smartphone or laptop. Digital banks prioritize efficiency and cut the middle man: customers no longer need to wait in lines and make appointments to achieve their goals.   * Putting the customers’ needs first. While all banks are trying hard to meet customers’ evolving needs, digital banks take one step further. Drawing on the previous point, big data helps digital banks to understand their customers and improve their experience. For instance, some digital banks provide money management services, using whi