An analysis of the impact of AI on the banking system and its various applications in financial institutions and smart banking across different countries
Abstract
Today, artificial intelligence technologies are advancing rapidly, and their transformative impact is evident across various industries. Following the COVID-19 pandemic in late 2019, the volume of digital interactions worldwide increased significantly, prompting major tech companies to focus on offering innovative digital financial services. The use of AI in the banking industry has been no exception. Due to the potential benefits that various forms of artificial intelligence can bring to the banking sector, it has gained global attention. According to McKinsey estimates, AI could generate up to one trillion dollars in additional value annually for the global banking industry.
The Development Trend of Artificial Intelligence and Its Impact on Banking
- Responsible AI – Ensures ethical and fair use of AI, with growing investment in governance and transparency.
- Generative AI – Creates new content (text, images, etc.) from data, offering major benefits to banks.
- Explainable AI – Improves trust by making AI decisions transparent and understandable.
These trends show banks are adopting AI in a responsible and innovative way.
Practical Applications of Artificial Intelligence
- Increasing Digital Profit: Banks use AI to turn digital customer interactions into sales opportunities without needing more staff.
- Boosting Employee Productivity: AI helps speed up tasks like coding, document summarization, and call transcription.
- Personalized Solutions: AI delivers customized product recommendations and automated financial advice to customers.
- Cybersecurity and Fraud Detection: AI detects transaction anomalies in real-time to prevent fraud and assess risks.
These applications help banks improve efficiency, customer experience, and security.
Global Experiences of Using Artificial Intelligence in Banking
- India: Rapid mobile growth has boosted fintech with innovative digital banking services. A 2019 regulatory framework supports AI-driven automation and consumer protection.
- Russia: Sberbank uses AI for voice assistants, chatbots, and personalized mobile apps, improving service speed and efficiency.
- China: Major banks like ICBC apply AI language models to enhance wealth management, investment advice, and marketing, reducing costs and increasing efficiency.
This study was conducted at ICT Research institute and Technology Studies Institute by Mozhgan Shavandi, Mohammadjavad Javidi and Salman Khajeh in 2024.
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