The present study aims to analyze the challenges of the technological transition of digitalization in Iran's banking services industry using a multi-level perspective (MLP). This research is developmental-applied in terms of purpose and qualitative in terms of nature. Semi-structured interviews were used to collect data. In addition, existing documents and records were also used as complementary sources for qualitative data analysis. Based on the results, the challenges of the digitalization transition were identified at three levels: landscape, regime, and niche. The challenges at the landscape level include two main issues: international sanctions and the complexities of importing technological equipment. The challenges at the regime level include stringent regulations for identity verification and electronic signatures, laws and regulations related to data security and privacy protection, weaknesses in data-sharing and cybersecurity regulations, strict anti-money laundering laws, and the absence of appropriate regulations for cryptocurrencies and digital tokens. Finally, the challenges of the digitalization transition in Iran's banking services industry at the niche level include human resistance to digital changes, insufficient attention to workforce training, low public trust in the security of digital banking, limited public capability in using digital banking, concerns about job loss due to the expansion of digital services, and the persistence of a traditional branch-oriented mindset among people