Citation:

Abdul Khader Aneesh A, Abdul Jaleel K A, Abdul Rasheed K.M. "Charting the Uncharted: Prospective Advancements in Artificial Intelligence within the Banking Sector" International Research Journal of Economics and Management Studies, Vol. 2, No. 4, pp. 24-34, 2023.

Abstract:

The rapid advancement of technology worldwide is being driven by Artificial Intelligence (AI). This study intends to assess how digitalisation has affected using Artificial Intelligence (AI) in banking to handle customer questions and complaints using completely automated or human-assisted methods. The ultimate goal of this study is to raise awareness and demonstrate the benefits of AI to banks. The qualitative research that formed the basis of this study used secondary data sources. To find and evaluate pertinent publications, a thorough search was done utilising databases like , Web of Science, MEDLINE, and Scopus. The study also relied on information obtained from various sources, including books, newspapers, and government statistics. The study's findings state that AI technologies have the greatest potential for cost savings across various banks, particularly in front and middle-office operations. In an effort to prevent fraudulent payments and improve anti-money laundering and KYC regulations, banks are integrating AI into their middle office operations. Additionally, banks are utilising AI to improve client identification and verification, provide personalised insights and suggestions, enhance customer relationships through chatbots and voice assistants, and simulate human interactions. A thorough grasp of the many uses of AI in banking will be provided by this study. It will serve as a useful resource for banks and financial institutions to leverage AI for optimal results effectively.

References:

[1] Fetzer, J. H. (1990). What is Artificial Intelligence?, In Artificial Intelligence: Its Scope and Limits, Springer, 4(1), 3-27.
[2] Smith, A., & Nobanee, H. (2020). Artificial intelligence: in banking A mini-review, SSRN, 1(1), 1-9.
[3] Alzaidi, A., & Kazakov, D. (2008). Artificial Intelligence for Islamic Banking. The Journal of Muamalat and Islamic Finance Research, 5(1), 1-15.
[4] Ince, H., & Aktan, B. (2009). A comparison of data mining techniques for credit scoring in banking: A managerial perspective. Journal of Business Economics and Management, 10(3), 233-240.
[5] Eletter, S. F., Yaseen, S. G., & Elrefae, G. A. (2010). Neuro-based artificial intelligence model for loan decisions. American Journal of Economics and Business Administration, 2(1), 27-34.
[6] MARIA, A. (2007). Integration of geographical information systems and artificial intelligence technics to support banking industry decision taking. Bol. Ciênc. Geod., sec. Artigos, 13(2), 353-368.
[7] Davenport, T. H., & Ronanki, R. (2018). Artificial intelligence for the real world. Harvard business review, 96(1), 108-116.
[8] Kaur, D., Sahdev, S. L., Sharma, D., & Siddiqui, L. (2020). Banking 4.0:‘The influence of artificial intelligence on the banking industry & how AI is changing the face of modern day banks’. International Journal of Management, 11(6), 577-585.
[9] Kaya, O., Schildbach, J., AG, D. B., & Schneider, S. (2019). Artificial intelligence in banking. Artificial intelligence. 1(1), 1-9.
[10] Bauguess, S. W. (2017). The role of big data, machine learning, and AI in assessing risks: A regulatory perspective. Machine Learning, and AI in Assessing Risks: A Regulatory Perspective. 1(1),1-6.
[11] Königstorfer, F., & Thalmann, S. (2020). Applications of Artificial Intelligence in commercial banks–A research agenda for behavioral finance. Journal of behavioral and experimental finance, 27(1), 1-32.
[12] Ris, K., Stankovic, Z., & Avramovic, Z. (2020). Implications of implementation of Artificial Intelligence in the banking business with correlation to the human factor. Journal of Computer and Communications, 8(11), 130-144.
[13] Mhlanga, D. (2021). Financial inclusion in emerging economies: The application of machine learning and artificial intelligence in credit risk assessment. International Journal of Financial Studies, 9(3), 1-16.
[14] Singh, K. (2020). Banks banking on ai. International Journal of Advanced Research in Management and Social Sciences, 9(9), 1-11.
[15] Payne, E. H. M., Peltier, J., & Barger, V. A. (2021). Enhancing the value co-creation process: artificial intelligence and mobile banking service platforms. Journal of Research in Interactive Marketing. 5(1), 68-85.
[16] Vijai, C., Suriyalakshmi, S. M., & Elayaraja, M. (2020). The future of robotic process automation (RPA) in the banking sector for better customer experience. Journal of Commerce, 8(2), 61-65.
[17] Malali, A. B., & Gopalakrishnan, S. (2020). Application of Artificial Intelligence and Its Powered Technologies in the Indian Banking and Financial Industry: An Overview. IOSR Journal Of Humanities And Social Science, 25(4), 55-60.
[18] Srivastava, S. K. (2018). Artificial Intelligence: way forward for India. JISTEM-Journal of Information Systems and Technology Management, 15(1). 1- 23.
[19] Zhao, Q., Tsai, P. H., & Wang, J. L. (2019). Improving financial service innovation strategies for enhancing china’s banking industry competitive advantage during the fintech revolution: A Hybrid MCDM model. Sustainability, 11(5), 1419.
[20] 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(3), 267-283.
[21] Wilson, H. J., & Daugherty, P. R. (2018). Collaborative intelligence: Humans and AI are joining forces. Harvard Business Review, 96(4), 114-123.
[22] Arjun, R., Kuanr, A., & Suprabha, K. R. (2021). Developing banking intelligence in emerging markets: Systematic review and agenda. International Journal of Information Management Data Insights, 1(2), 1-11.
[23] Vedapradha, R., & Ravi, H. (2021). Innovation and challenges of blockchain in banking: a scientometric view. Asia Pacific Journal of Innovation and Entrepreneurship, 15(1), 51-61.
[24] Adhikari, R. P., Aryal, T., & Park, G. (2022). Impact Of Artificial Intelligence On Commercial Bank's ATM. Farabi Journal of Social Sciences, 8(2), 46-52.
[25] Lau, T., & Leimer, B. (2019). The era of connectedness: How AI will help deliver the future of banking. Journal of Digital Banking, 3(3), 215-231.
[26] Mor, S., & Gupta, G. (2021). Artificial intelligence and technical efficiency: The case of Indian commercial banks. Strategic Change, 30(3), 235-245.
[27] Gomber, P., Kauffman, R. J., Parker, C., & Weber, B. W. (2018). On the fintech revolution: Interpreting the forces of innovation, disruption, and transformation in financial services. Journal of management information systems, 35(1), 220-265.
[28] Naim, A., Alahmari, F., & Rahim, A. (2021). Role of artificial intelligence in market development and vehicular communication. Smart Antennas: Recent Trends in Design and Applications, 2(1), 28-39.
[29] Thowfeek, M. H., Samsudeen, S. N., & Sanjeetha, M. B. F. (2020). Drivers of Artificial Intelligence in Banking Service Sectors. Solid State Technology, 63(5), 6400-6411.
[30] Al-Surmi, A., Bashiri, M., & Koliousis, I. (2022). AI based decision making: combining strategies to improve operational performance. International Journal of Production Research, 60(14), 4464-4486.
[31] Hammer, A., & Karmakar, S. (2021). Automation, AI and the Future of Work in India. Employee Relations: The International Journal. 43(6), 1327- 1341.
[32] Melnychenko, O. (2020). Is artificial intelligence ready to assess an enterprise’s financial security? Journal of Risk and Financial Management, 13(9), 191.
[33] Villar, A. S., & Khan, N. (2021). Robotic process automation in banking industry: a case study on Deutsche Bank. Journal of Banking and Financial Technology, 5(1), 71-86.
[34] Mohammed, I. A. (2020). Artificial Intelligence for Cybersecurity: A Systematic Mapping Of Literature. International Journal of Innovations in Engineering Research And Technology [IJIERT], 7(9). 172-176.
[35] Baftijari, A. (2021). New Trends in The Banking-Financial Sector. Economic Vision-International Scientific Journal in Economics, Finance, Business, Marketing, Management and Tourism, 8(15), 11-22.
[36] Polak, P., Nelischer, C., Guo, H., & Robertson, D. C. (2020). “Intelligent” finance and treasury management: what we can expect. AI & SOCIETY, 35(3), 715-726.
[37] Sindhu, J., & Namratha, R. (2019). Impact of artificial intelligence in chosen Indian Commercial Bank–A cost benefit analysis. Asian Journal of Management, 10(4), 377-384.
[38] Tripathi, S., Garg, R., & Varshini, K. Role of Artificial Intelligence in The Banking Sector. 3(9), 433-442.
[39] Andhra Bank launches AI virtual assistant (2019), Retrieved From https://www.expresscomputer.in/artificial-intelligence-ai/andhrabank-launches-ai-virtual-assistant/38027/ on 21-11-2022.
[40] Deb, R. (2021). YES Bank fiasco: a corporate governance failure. Decision, 48(2), 181-190.
[41] Subudhi, S. R. I. H. A. R. I. (2019). Banking on artificial intelligence: Opportunities & challenges for banks in India. International Journal of Research in Commerce, Economics & Management, 9(7).
[42] Jaiwani, M., & Gopalkrishnan, S. (2022). Adoption of RPA and AI to Enhance the Productivity of Employees and Overall Efficiency of Indian Private Banks: An Inquiry. In 2022 International Seminar on Application for Technology of Information and Communication (iSemantic).191-197.
[43] Vinoth, S. (2022). Artificial intelligence and transformation to the digital age in Indian banking industry–a case study. Artif. Intell, 13(1), 689-695.
[44] Shawna Guha. (2019). Arificial Intelligence in Indian Banking Scenario: Practically Possible?, Retrieved From https://timesofindia.indiatimes.com/readersblog/smallscribbler/artificial-intelligence-in-indian-banking-scenario-practically-possible-5312/ on 26-11- 2022.
[45] Srivastava, K. (2021). Paradigm shift in Indian banking industry with special reference to artificial intelligence. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(5), 1623-1629.
[46] Yadav, R. A., & Arunmozhi, M. Comparing the Internal Business Process Of Balanced Scorecard Within The Banking Sector In India. Journal of Tianjin University Science and Technology. 54(6), 155-170.
[47] Lu, Y. (2019). Artificial intelligence: a survey on evolution, models, applications and future trends. Journal of Management Analytics, 6(1), 1-29.
[48] Kumar, A., Srivastava, A., & Gupta, P. K. (2022). Banking 4.0: The era of artificial intelligence‐based fintech. Strategic Change, 31(6), 591-601.
[49] Pal, S. N., & Singh, D. (2019). Chatbots and virtual assistant in Indian banks. Industrija, 47(4), 75-101.
[50] Hari, H., Iyer, R., & Sampat, B. (2022). Customer brand engagement through chatbots on bank websites–Examining the antecedents and consequences. International Journal of Human–Computer Interaction, 38(13), 1212-1227.
[51] Song, Y., & Luximon, Y. (2020). Trust in AI agent: A systematic review of facial anthropomorphic trustworthiness for social robot design. Sensors, 20(18), 5087.
[52] Davenport, T. H. (2018). From analytics to artificial intelligence. Journal of Business Analytics, 1(2), 73-80.
[53] Agarwal, A., Singhal, C., & Thomas, R. (2021). AI-powered decision making for the bank of the future. McKinsey & Company. 1(1), 1-12.
[54] Soni, V. D. (2019). Role of Artificial Intelligence in Combating Cyber Threats in Banking. International Engineering Journal For Research & Development, 4(1), 7-7.
[55] Kaloudi, N., & Li, J. (2020). The ai-based cyber threat landscape: A survey. ACM Computing Surveys (CSUR), 53(1), 1-34.
[56] Fares, O. H., Butt, I., & Lee, S. H. M. (2022). Utilization of artificial intelligence in the banking sector: a systematic literature review. Journal of Financial Services Marketing, 1-18.
[57] Naim, A. (2022). Role of Artificial Intelligence in Business Risk Management. American Journal of Business Management, Economics and Banking, 1, 55-66.
[58] Di Vaio, A., Palladino, R., Hassan, R., & Escobar, O. (2020). Artificial intelligence and business models in the sustainable development goals perspective: A systematic literature review. Journal of Business Research, 121(1), 283-314.
[59] Meghani, K. (2020). Use of Artificial Intelligence and Blockchain in Banking Sector: A Study of Scheduled Commercial Banks in India. Use of Artificial Intelligence and Blockchain in Banking Sector: A Study of Scheduled Commercial Banks in India, Kishore Meghani Indian Journal of Applied Research, 10(8). 1-4.
[60] Neale, F. R., Drake, P. P., & Konstantopoulos, T. (2020). InsurTech and the Disruption of the Insurance Industry. Journal of Insurance Issues, 43(2), 64-96.
[61] Truby, J., Brown, R., & Dahdal, A. (2020). Banking on AI: mandating a proactive approach to AI regulation in the financial sector. Law and Financial Markets Review, 14(2), 110-120.
[62] Lee, J. (2020). Access to finance for artificial intelligence regulation in the financial services industry. European Business Organization Law Review, 21(4), 731-757.
[63] Ghandour, A. (2021). Opportunities and Challenges of Artificial Intelligence in Banking: Systematic Literature Review. TEM Journal, 10(4), 1581- 1587.
[64] Reddy, K. N., Harichandana, U., Alekhya, T., & Rajesh, S. M. (2019). A study of robotic process automation among artificial intelligence. International Journal of Scientific and Research Publications, 9(2), 392-397.
[65] Nikitha, G. N., Chandana, C., Neelashree, N., Nisargapriya, J., & Vishwesh, J. (2020). Bank customer complaints analysis using natural language processing and data mining. International Journal of Progressive Research in Science and Engineering, 1(3), 22-25.
[66] Tarafdar, M., Beath, C. M., & Ross, J. W. (2019). Using AI to enhance business operations. MIT Sloan Management Review, 60(4), 37-44.
[67] Lee, S. M., & Lee, D. (2020). “Untact”: a new customer service strategy in the digital age. Service Business, 14(1), 1-22.
[68] Eren, B. A. (2021). Determinants of customer satisfaction in chatbot use: evidence from a banking application in Turkey. International Journal of Bank Marketing. 39(2), 294-311.
[69] Shen, H., & Kurshan, E. (2020, October). Deep Q-network-based adaptive alert threshold selection policy for payment fraud systems in retail banking. In Proceedings of the First ACM International Conference on AI in Finance. 1-7.
[70] Mărăcine, V., Voican, O., & Scarlat, E. (2020). The digital transformation and disruption in business models of the banks under the impact of FinTech and BigTech. In Proceedings of the International Conference on Business Excellence. 294-305.
[71] Satheesh, M. K., & Nagaraj, S. (2021). Applications of artificial intelligence on customer experience and service quality of the banking sector. International Management Review, 17(1), 9-86.
[72] Singh, C., & Lin, W. (2020). Can artificial intelligence, RegTech and CharityTech provide effective solutions for anti-money laundering and counterterror financing initiatives in charitable fundraising. Journal of Money Laundering Control. 24(3), 464-482.
[73] Madhura, K., & Niyaz Panakaje, D. (2022). Development of Fashionable Products through Online Retailing: A Case Study on Amazon and Flipkart. International Journal of Case Studies in Business, IT, and Education (IJCSBE), ISSN, 6(1), 61-75.
[74] Aithal, P. S., & Aithal, S. (2019). New Directions in Scholarly Research–Some Fearless Innovations & Predictions for 21st Century Research. International Journal of Management, Technology, and Social Sciences (IJMTS), 4(1), 1-19.
[75] Bindhu, D. & Niyaz. (2021). Corporate Social Responsibility-A Study on Mangalore Refinery and Petrochemicals Limited (MRPL). International Journal of Case Studies in Business, IT and Education (IJCSBE), 5(2), 375-385.
[76] Kambali, U. & Niyaz. (2021). An Overview of Agriculture Finance in India. International Journal of Case Studies in Business, IT and Education (IJCSBE), 5(2), 197-210.
[77] Mendon, S., Salins, M., & Aithal, P. S. (2019). Challenges Associated with Running A Green Business in India and Other Developing Countries. International Journal of Case Studies in Business, IT, and Education (IJCSBE), 3(1), 35-47.
[78] Aswani, T. D., & Bhat, S. THE PROBLEMS AND CHALLENGES OF THE HANDLOOM INDUSTRY–A CASE STUDY IN CHENDAMANGALAM, ERNAKULAM (DT.) KERALA, 4(2), 1553-1561.
[79] Frederick, D. P., & Bhat, G. (2022). SWOT Analysis of Swiggy-An Online Food Deliverer. International Journal of Case Studies in Business, IT, and Education (IJCSBE), 6(2), 821-830.
[80] Bharathi, & Mayya, S., (2022). A Study on Marketing Strategies and SWOC Analysis of Himalaya Wellness Private Ltd. International Journal of Case Studies in Business, IT, and Education (IJCSBE), 6(2), 637-654.
[81] Kshetri, N. (2021). The role of artificial intelligence in promoting financial inclusion in developing countries. Journal of Global Information Technology Management, 24(1), 1-6.
[82] Robotic Process Automation (RPA) in Banking Industry (2023). Retrieved From https://automationedge.com/blogs/robotic-process-automation-rpa-inbanking-industry/ on 5-01-2023.
[83] Akter, S., Michael, K., Uddin, M. R., McCarthy, G., & Rahman, M. (2020). Transforming business using digital innovations: The application of AI, blockchain, cloud and data analytics. Annals of Operations Research, 1(1),1-33.
[84] B, Pramod., K , Shadaab., K .Vineet. (2021) AI in Banking Market. Retrieved From https://www.alliedmarketresearch.com/ai-in-banking-marketA11871#:~:text=The%20global%20AI%20in%20banking,32.6%25%20from%202021%20to%202030. On 01-01-2023.

Keywords:

Banking, Artificial Intelligence (AI), SWOC analysis, Scam and Fraud Detection, Chatbots.