This article aims to examine the literature on digital transformation in the banking sectors and the current commercial banks’ digital transformation landscape in Vietnam. The paper provides examples of some local commercial banks to show that digital banking should be considered an integral part of smart cities. The paper also analyzes the challenges facing Vietnamese banks in their digitalization process to become smarter banks. Next, the study makes some recommendations about how to leverage the digitalization process in the Vietnamese banking system. It can be concluded from this research that digital transformation is key to the banking industry creating value for the customer and keeping pace with innovation in smart cities where people expect real-time, instant gratification. This paper also suggests further research directions.