This thesis investigates whether digital-only banks in Europe exhibit systematically different levels of operational efficiency compared to hybrid institutions that combine digital channels with a physical presence. The rapid digital transformation of the banking sector has reshaped cost structures, competitive dynamics, and organizational models, yet empirical evidence on the efficiency implications of fully digital business models remains inconclusive. The analysis constructs a bank-year panel dataset covering the period 2019–2024, based on publicly available annual reports and financial statements. Operational efficiency is proxied by the Cost-to-Income Ratio (CIR), a widely used accounting-based measure of cost performance. The empirical framework relies on panel regressions that compare digital-only and hybrid banks while controlling for key structural determinants of efficiency, including bank size, credit risk, asset composition, revenue structure, and cost composition.