The topic of the thesis is to examine the effect digitalisation has had, and is having on the banking industry, more specifically, on the products/services offered by banking institutions, and the interactions and relationships between bank and customer. The thesis will also examine the customers‘ evolving banking habits and preferences. Digitalisation is having a profound impact on the nature of customer product and service provision. And the banking sector is no exception. New entrants (among them BigTech and FinTech firms) are applying competitive pressure on established banks by leveraging new innovative technology and business models. Customers (especially the younger generations) are increasingly expecting these new technologies to be made available to them, as the convenience factor digitalisation brings grows in importance. The development and constant improvement of banking Apps and online banking platforms is therefore crucial. The Thesis has the following objectives: - To explain the concept of digital banking services. - To show current trends in digitalisation of banking products and services - To identify the factors that induce the customers to prefer digital banking services over conventional banking services. - To assess the level digital affinity of banking customers in Croatia - To assess the importance of digital channels to banking customers in Croatia