Application of Artificial intelligence in Digital Transformation of Indian Banking Industry

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Noor Firdoos Jahan, Chaitanya Kamatagi B, Nikhil S Anjanalli, Nayan Kumar

Abstract

India is putting into practise a number of strategies to enhance the performance of banking services to its valuable customers as it move towards the larger economy and towards its goal of becoming an economic powerhouse in this subcontinent because the banking sector is crucial to the efficient operation of the economy. At present Artificial Intelligence (AI) technology is helping banks in their transformation and improving services to their customers. In this research, we examine how several banking operations have changed as a result of the growing usage of AI. The purpose of the research is to assess the possible advantages and restrictions of AI applications in the banking sector. We analyse the adoption of AI in banking by doing a systematic review of relevant literature, reviewing industry publications, and analysing primary data from a survey of 203 participants. Our findings suggest that AI is driving significant innovation in the financial services industry. Artificial intelligence (AI)-powered Chatbots and Virtual Assistants are assisting banks in providing effective, individualized service to customers while speeding up response times and enhancing customer satisfaction. Additionally, banks are using AI algorithms for fraud detection and prevention to improve security protocols and protect consumer assets by detecting trends and anomalies in real-time. Additionally gaining up momentum is the use of AI in risk management and compliance. Large financial data sets can be analysed by cutting-edge AI models, which can also identify possible hazards and make precise predictions. This helps banks make informed decisions and adhere to regulatory standards. Additionally, AI-driven credit scoring and loan underwriting algorithms are enhancing the lending process. However, Key issues that need attention include ethical considerations, data privacy issues, and the requirement for algorithm transparency. To maintain customer trust and regulatory compliance, banks must build strong governance frameworks and ensure ethical usage of AI.

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How to Cite
Noor Firdoos Jahan, Chaitanya Kamatagi B, Nikhil S Anjanalli, Nayan Kumar. (2023). Application of Artificial intelligence in Digital Transformation of Indian Banking Industry. European Economic Letters (EEL), 13(4), 385–399. Retrieved from https://www.eelet.org.uk/index.php/journal/article/view/598
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