همایش آروین البرز EAB JOURNAL 1 3 2025 12 10 The Dual Transformation of Banking: Integrating Artificial Intelligence and Digital Finance for Economic Growth and Stability The Dual Transformation of Banking: Integrating Artificial Intelligence and Digital Finance for Economic Growth and Stability 165 181 10.22051/jera.2021.31891.2698 FA سمیه دانشگاه ارومیه 2025 12 01 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. 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. /downloadfilepdf/275566