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Artificial Intelligence in the Banking Industry: A Short Overview
Artificial Intelligence (AI) is rapidly transforming the banking industry, offering significant improvements in efficiency, cost reduction, and customer experience.
ECONOMICS AND SOCIAL SCIENCES INNOVATION DIGEST
2/3/20251 min read


Artificial Intelligence (AI) is rapidly transforming the banking industry, offering significant improvements in efficiency, cost reduction, and customer experience (Mehndiratta et al., 2023). Banks are adopting AI-enabled technologies in various areas, including risk assessment, credit approval, investment management, fraud detection, and personalized financial advisory services (Kaur & Tanwar, 2023; Mehndiratta et al., 2023).
AI has proven to be a disruptive financial technology in mobile banking, enhancing user acceptance and adoption of banking applications. Research shows that perceived intelligence and anthropomorphism of AI features can increase user satisfaction and foster continuance intentions in mobile banking (Lee et al., 2023). However, the implementation of AI in banking faces challenges such as organizational resistance, high implementation costs, skill gaps, and lack of regulatory frameworks (Kaur and Tanwar, 2023).
The banking sector is witnessing a surge in research on AI applications, with studies focusing on bank efficiency, risk assessment, performance, mergers and acquisitions, regulation, customer-related studies, and fintech integration (Doumpos et al., 2022; Fares et al., 2022). While AI offers numerous benefits, it also raises concerns about bias and discrimination, particularly in areas like credit scoring and loan underwriting (Lui and Lamb, 2018). As AI continues to evolve, there is a growing need for augmented intelligence collaboration between industry players and regulators to ensure seamless regulation and financial stability (Lui & Lamb, 2018; Mehrotra, 2019).
References
Kaur, A., Tanwar, A., 2023. Adoption Potential and Challenges of Artificial Intelligence in Banking. igi global, pp. 271–293. https://doi.org/10.4018/979-8-3693-1388-6.ch019
Lee, J.-C., Tang, Y., Jiang, S., 2023. Understanding continuance intention of artificial intelligence (AI)-enabled mobile banking applications: an extension of AI characteristics to an expectation confirmation model. Humanities and Social Sciences Communications 10. https://doi.org/10.1057/s41599-023-01845-1
Lui, A., Lamb, G.W., 2018. Artificial intelligence and augmented intelligence collaboration: regaining trust and confidence in the financial sector. Information & Communications Technology Law 27, 267–283. https://doi.org/10.1080/13600834.2018.1488659
Mehndiratta, N., Arora, G., Bathla, R., 2023. The use of Artificial Intelligence in the Banking Industry. institute of electrical electronics engineers. https://doi.org/10.1109/reedcon57544.2023.10150681