This paper analyzes the fundamental characteristics of banking operations, including reviews of various types of banks and banking activities, such as active, passive, and neutral transactions. It also addresses the regulatory frameworks that govern the banking sector. Additionally, the paper examines the banking market of the Republic of Croatia, which represents a key segment of the country’s financial system. The structure of the banking market, bank concentration, and market conditions that shape the sector are analyzed in detail. Key factors such as market competition regulation, price determination, entry and exit barriers, and infrastructure investments are also considered. Special attention is given to the digital transformation of banks, with an emphasis on the impact of fintech companies on competition and the digitalization of banking operations. By using analytical methods such as SWOT, PESTLE, and Porter’s Five Forces model, the paper provides deeper insights into the operations of Privredna banka Zagreb d.d. and its adaptation to the challenges of modern banking. Finally, the paper offers conclusions on the current state of the banking sector and proposes strategic steps to improve competitiveness and foster further growth of Privredna banka Zagreb d.d.