Managing banking crises in the digital economy: A post-pandemic analysis

Abstract

The global banking sector has witnessed radical structural transformations in light of the growing digital economy. However, the COVID-19 pandemic presented an unprecedented stress test, revealing the strengths and weaknesses of traditional crisis management strategies. This research aims to analyze the role of digital economy tools and financial technologies (FinTech) in enhancing banks' resilience and their ability to manage and recover from crises in the post-pandemic era.

The research employed a descriptive-analytical approach, reviewing theoretical literature and analyzing financial data and digital indicators from a sample of banks (local, regional, and international) in the period following the pandemic, to assess the extent to which digital transformation contributed to absorbing financial and operational shocks

The study reached several conclusions, most notably that banks that adopted comprehensive digital banking strategies before the crisis were faster to recover and better able to ensure business continuity compared to traditional banks. The findings also demonstrated that the digital economy has shifted the concept of crisis management from reactive to proactive by leveraging big data and artificial intelligence to predict risks.

In light of these findings, the study recommended re-engineering banking risk management systems to align with the digital economy environment, emphasizing cybersecurity as the cornerstone of trust in digital transactions, and urging central banks to update their regulatory frameworks to be more flexible in addressing future unconventional crises.