Adoption Potential and Challenges of Artificial Intelligence in Banking

Abstract

The proliferation of artificial intelligence (AI) evolved new business models through disruptive innovations. Recent technology developments and quicker data accessibility have moved it closer to commercial applications in financial industries. The study focused on exploring the significance and emergence of AI in the banking industry. This chapter depicting the adoption of AI in the banking sector also discusses the ground-level challenges in its large-scale implementation. Exploratory research was undertaken to examine the applications and factors that support and hinder the effective adoption of AI in the banking industry. Conventional banks are adopting AI due to the emergence of FinTech start-ups in their operations to improve productivity and customer services. The findings suggest that organizational resistance due to the high cost of implementation, skill, and lack of regulatory framework creates hurdles in its fuller adoption, and trust in financial technology is the critical indicator from the user's perspective.