This study examines the relationship between digital transformation and customer loyalty in the banking sector. The study addresses the issues of the impact of the introduction of advanced digital technologies on customers’ loyalty intentions and whether these impacts are influenced by changing service experiences. The study adopted a quantitative research design, where data for the study was obtained from 255 respondents sampled from retail banking customers and analysed quantitatively using Structural Equation Modelling (SEM) in SPSS and AMOS to test direct and indirect relationships between digital transformation, customer experience and loyalty. The findings of the study revealed that digital transformation has a moderate positive influence on customer experience and customer loyalty. Moreover, customer experience substantially predicts loyalty and mediates the association between digital transformation and customer loyalty. Demographic factors including gender, age and education are non-significant predicting factor of loyalty implying that, benefits of digital transformation and enhanced experiences are equal on all customer segments. The study is specific to retail banking in one national context and therefore may not be generalized to other regions or the financial service sector generally. Future departures from current research should include sectoral variations, longitudinal influences, and other mediating variables such as trust or perceived value to enrich the study of loyalty formation in digital context.