Innovations that Digitalization Brings to the Finance Sector

Rahmi Yücel (ed)
Bolu Abant İzzet Baysal University
Yaşar Ayyıldız (ed)
Bolu Abant İzzet Baysal University
Hülya Er (ed)
Bolu Abant İzzet Baysal University


When we look at human history, it is observed that there have been a limited number of fractures. The first of these breaks manifested itself in the transition from hunting to agricultural society and settled life. The second break is the transition from an agricultural society to an industrial society, which started with the invention of the steam engine. There are periods of more than centuries between these two breaks. The third breakthrough was the Information Age or the discovery of the internet, which emerged with the invention of chip technology. With the transition to the information age, technological developments and especially digitalization have managed to make themselves felt at almost every stage of life. Digitalization has not only led to the emergence of new alternatives and challenges but also led to structural and paradigmatic transformations in the entire life and business ecosystem. With digitalization, not only technological devices have entered our lives but also led to changes in our evaluations and references towards the business world and daily life. Traditional ways, methods, and tools are no longer sufficient in the new world and require new approaches and perspectives. The financial sector has also had its share of these changes and has brought with it new challenges posed by the conveniences and opportunities provided by financial technologies. In this book, valuable academics and researchers discuss and evaluate the digitalization practices in the financial sector, the results created by financial technologies in the sector, and the advantages and challenges they bring, in the light of the information in the relevant literature. Brief information about the chapters in the book is given below.

Four studies discuss the effects of digitalization in the financial sector, developments in digital finance, financial innovation, and trends in the sector. The first of these studies is the study on financial innovation prepared by Derya Yücel and Rahmi Yücel. This study explains the relationship between innovation, finance, and economic growth and highlights the critical role of financial innovation in this relationship. It also shows that financial innovation in the banking sector in the last decade has been shaped by technological developments and the products and services in this field have diversified rapidly. It emphasizes the importance of developing new financial products and services in areas such as green energy, crypto assets, and green finance in the future to support sustainability goals.

The fact that information technology plays an important role in the transformation of the financial sector is especially because digital technologies reveal new business models. In the study prepared by Hasan Durmuş, discussing the role of digital transformation in the financial sector, after the explanations on the phenomenon of digital transformation, the services offered by FinTech technologies in the financial services sector and the changes in the ecosystem in the sector are emphasized.

The situation in Turkey regarding digital transformation in the sector has also been tried to be evaluated in the light of various statistics. The rapid development of new technologies has a significant impact on the development of the financial sector. It is emphasized in the study that digitalization leads to the development of new business models, the transformation of value chains, new product distribution channels, relations between companies in the financial sector, and a change in the structural structure of the financial sector. The natural result of this is the emergence of alternative services and new industries, and the introduction of innovative new products and services to people. In the third study, İbrahim Karagöz discusses new trends in the context of digital finance. In addition to brief explanations of the concepts of DeFi, DEX, NFT, CBDC, P2E, P2P, and BNPL, which are defined as new trends in the context of digital finance in today's business world, their importance for the sector is also mentioned. The last study in this context, written by Ahmet Özdemir, deals with the opportunities, challenges, and innovations that will arise from considering the developments in the digital finance sector together with the phenomenon of artificial intelligence. In the study prepared in the light of a systematic literature review, the author emphasizes the benefits of artificial intelligence applications for the financial sector, as well as the new challenges and possible threats that will arise. In the study, an attempt was made to make a general evaluation of the sector by presenting the prominent opinions in the literature regarding the positive and negative aspects of artificial intelligence.

There are also two studies on the role and importance of digitalization and digital technologies on business performance in the banking sector, more specifically in the context of interest-free banking or participation banking. The first of these is the study prepared by Kayhan Ahmetoğulları, which deals with the effects of digitalization on corporate performance in the participation banking sector. FinTech technologies, which have become increasingly widespread in recent years, are not only new applications or alternatives for the financial sector, but they not only lead to radical changes in the finance and banking ecosystem but also cause existing applications to be insufficient and therefore necessitate the development of new and different solutions and methods. is emphasized. Another study in the context of the banking and finance sector is the study on the future role of Islamic finance and financial technologies, written by Hülya Er. In the said study, predictions that FinTech technologies are not only effective in the traditional banking and finance sector but also in Islamic finance and banking applications, which are becoming increasingly popular today, will open new windows and that the future of the sector will be brighter with the help of technological developments, are evaluated and possible inferences are emphasized.

A study on Blockchain Technology, which has been considered a revolution in recent years as a result of digitalization, is evaluated by Yaşar Ayyıldız and Hayrettin Özden on the use of Blockchain Technology for taxation purposes. After giving basic information about Blockchain Technology, the possible role of this technology in the context of smart contracts is examined. In addition, after touching on the potential that smart contracts can offer in the context of taxation, the conveniences they will offer in matters such as tax auditing, taxation of wages, and value-added tax are among the main topics of the study. It is also emphasized in the study that the rapidly changing structure of the digital economy brings with it difficulties in terms of the flexibility and speed required for governments and regulatory institutions to monitor and harmoniously integrate this technology. The emphasis in the article comes to the fore that Blockchain Technology, which is still in its development stage, should become widespread in the field of taxation, but many studies should be carried out at national and global levels and, more importantly, the legal regulations that should be prepared by taking into account the differences between countries should be put into effect immediately.

In another study in the context of taxation, Yunus Demirli, and Bediha Sultan Zıvalı examine the Digital Service Tax (DST). In the study, it is stated that current international taxation practices are insufficient in taxing multinational companies that provide digital services, and this situation causes problems in the process of regulating taxation justice and competition conditions, as well as tax losses of countries. Information about the Digital Service Tax phenomenon, which has been brought to the agenda by various countries in recent years, is given regarding current practices and suggestions and evaluations in the literature, and analyses are made on the subject in the light of the data obtained from 14 countries that have implemented DST. It is emphasized that possible solutions to this issue are through the formation of international taxation rules on the subject by higher-level organizations, such as the OECD, rather than country-based practices.

Dilek Eren evaluates the application of financial technologies in the tourism sector. The evaluations in question are like a literature review and information in the relevant literature between 2016 and 2023. In essence, the study primarily provides basic conceptual explanations about financial technologies, then provides information about the tourism sector and descriptive information about the financial technologies used in the tourism sector. Among the prominent concepts in the context of the study are topics such as Blockchain Technology, Metaverse, Cryptocurrency, Artificial Intelligence, Cloud Computing, and Digital Payment Systems. Haydar Özaydın makes evaluations in the light of the literature review on the importance and role of benefiting from public relations to make perceptions and attitudes toward applications and financial technology products, which are among the applications related to financial technologies that have been gaining popularity in recent years, more positive and to differentiate FinTechs from their counterparts in the intensifying competitive environment. Particularly in the FinTech sector, the possible contributions of public relations on issues such as trust, harmony, and customer satisfaction between investors and companies are tried to be interpreted in the light of the information in the literature, and it is emphasized that public relations has an important potential for the future of the sector.

Digitalization has enabled the use of financial technologies in the agricultural sector. Within the framework of this book, the impact of agricultural financial technologies (Agri-Fintech) on the agricultural sector is discussed by Bünyamin Göl and Çiğdem Tarhan. It is stated that farmers who produce with traditional methods are seen as risky by financial institutions and have difficulties in accessing finance. It is emphasized that with digitalization, financial institutions have made production forecasts using agricultural data and started to offer appropriate financial support to farmers.

In light of the information in the chapters in the book, one of the main issues emphasized in the studies is that digital transformation has an extremely high potential in today's modern world, especially in terms of the finance sector and accounting and taxation practices. However, it is also emphasized that the use of existing FinTech technologies in relevant fields is still in its infancy, but it is expected to have a much more serious impact in the future. However, it is also emphasized that the realization of this positive effect depends on the structural and legal regulations being made and implemented as soon as possible.

Hopefully, this work will shed light on academic researchers and practicing professionals and contribute to a better understanding of the subject. We hope the book will be useful…

Prof. Dr. Remzi ALTUNIŞIK

How to cite this book

Yücel, R. & Ayyıldız, Y. & Er, H. (eds.) (2023). Innovations that Digitalization Brings to the Finance Sector. Özgür Publications. DOI:



October 27, 2023