DIGITIZATION IN RETAIL BANKING: A REVIEW OF CUSTOMER ENGAGEMENT AND FINANCIAL PRODUCT ADOPTION IN SOUTH ASIA

Abstract

This systematic review examines the role of digitization in transforming retail banking, with a specific focus on customer engagement and financial product adoption across South Asia. The study investigates how digital technologies such as mobile banking, digital wallets, biometric identification, and fintech platforms have redefined user experiences and expanded access to financial services in diverse socio-economic and cultural settings. Guided by the PRISMA 2020 methodology, the review synthesizes findings from a total of 84 peer-reviewed and high-quality studies published between 2010 and 2024, encompassing empirical research, conceptual frameworks, and institutional reports. The findings reveal that digital infrastructure development, particularly mobile internet access and national ID integration, has significantly enhanced financial inclusion and enabled large-scale onboarding of previously unbanked populations. Furthermore, personalized user interfaces, behavioral nudges, and AI-driven financial tools have emerged as key drivers of customer engagement, promoting higher adoption of savings, credit, insurance, and investment products. The study also highlights the critical interplay between fintech innovation and regulatory frameworks, which collectively shape the scalability and inclusiveness of digital banking ecosystems. Overall, this review contributes a comprehensive and region-specific understanding of how digitization is influencing customer behavior, financial accessibility, and banking strategies in South Asia, while emphasizing the need for inclusive design, localized policy interventions, and continued cross-sector collaboration to bridge the remaining digital divides.