Impact of AI on Operational Efficiency: A Study of SBI and PNB

Abstract

Artificial Intelligence (AI) has become a driving force in reshaping the operational structure of the global banking industry. In India, public sector banks have increasingly adopted AI-driven technologies to strengthen operational efficiency, reduce costs, minimize human error, and enhance customer service delivery. This study examines the impact of AI on operational efficiency in the State Bank of India (SBI) and Punjab National Bank (PNB), the two largest public sector banks in the country. The research evaluates how AI tools—such as machine learning models, chatbots, automation platforms, fraud detection systems, and predictive analytics—have transformed core operations, including loan processing, risk management, customer service, back-office automation, and compliance monitoring.

Using secondary data from research articles, bank reports, digital transformation policies, and industry analyses, this study highlights the extent of AI integration in these banks. SBI has implemented advanced AI applications across multiple operational domains, including robotic process automation (RPA), AI-based credit scoring, intelligent customer service platforms like YONO, and real-time fraud analytics. PNB, while adopting AI at a progressive pace, has integrated AI in areas such as fraud risk mitigation, early warning systems for loan defaults, document verification, and automated customer query resolution. The analysis reveals that AI adoption in both banks has contributed to enhanced speed and accuracy of operations, reduced workload on employees, improved decision-making, and strengthened risk control mechanisms.

However, the implementation of AI also presents challenges, such as data security concerns, technical complexities, employee resistance, high initial investment costs, and legacy infrastructure limitations. The study concludes that AI has significantly improved operational efficiency in SBI and PNB, though the scale and impact vary across the institutions. To maximize the benefits of AI, these banks must invest in digital infrastructure, employee training, cyber security, and robust data governance frameworks.