The financial sector is currently undergoing a fundamental paradigm shift driven by the convergence of digital banking ecosystems and Artificial Intelligence (AI). This paper provides a comprehensive review of how these technologies are reshaping the banking landscape and influencing the broader economy. We analyze the critical opportunities presented by AI adoption, including enhanced fraud detection mechanisms, personalized customer experiences via generative AI, and significant cost reductions in operational processes. Furthermore, the study examines the macroeconomic impact of digital finance, specifically regarding financial inclusion in developing markets and its correlation with economic growth. However, this transformation is not devoid of risks. We critically assess the emerging challenges, such as the "black box" nature of algorithmic decision-making, data privacy concerns, and the escalation of sophisticated cybersecurity threats. The paper concludes that while the synergy of AI and digital banking offers unprecedented pathways for economic efficiency, it necessitates a robust, adaptive regulatory framework to mitigate systemic risks and ensure ethical compliance.

: Artificial Intelligence (AI) Digital Banking FinTech Financial Inclusion Cybersecurity Algorithmic Bias Economic Growth