Recently, there has been an increase in the number of studies examining the effects of digital banking on money and capital markets within the scope of financial innovation, and this subject has started to attract the attention of researchers. The aim of this research is to explain the categorically different effects of financial technologies and digital banking, which have made their presence felt in our daily lives in recent years, on money and capital markets.  As the method of the research, systematic literature analysis of the studies in the relevant field was carried out; common themes and research gaps were revealed by comparing the available findings. In the study, thematic/conceptual analysis of current research in the international literature was made by doing content analysis. The effects of digital banking based on financial innovation on money and capital markets are mainly concentrated in three areas, and we can classify them as effects on efficiency, liquidity and pricing, effects on banks and capital allocation, and finally effects on investor behavior and market dynamics. The literature review shows that fintech, digital banking, and digital transformation more broadly have multidimensional and two-way effects on equity markets and the banking sector. The studies examined show that these technologies increase transaction speed, reduce costs, expand market access, strengthen liquidity and transparency, improve price formation and risk management processes, and in some circumstances, improve banks' performance and competitiveness reveals that it supports. However, the same literature also shows that fintech-based innovations can increase stock price volatility, strengthen volatility spread in times of crisis, create new vulnerabilities in cybersecurity, data privacy and regulatory compliance, and investor reactions are not always one-way positive.