Artificial Intelligence Milieu: Implications for Corporate Performance in the Nigerian Banking Industry

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Artificial Intelligence Milieu: Implications for Corporate Performance in the Nigerian Banking Industry

Ononokpono, Nyong Joe, Osademe, Gloria Chinagozi, Prof. Akewushola Raheem Olasupo
Lagos State University, Ojo, Lagos State, Nigeria
Received: 01 March 2023; Revised: 25 April 2023; Accepted: 01 May 2023; Published: 30 June 2023

Abstract: – Artificial Intelligence (AI) is being used in the banking industry in Nigeria to scale new heights in customer relationship management. The function and popularity of Artificial Intelligence was soaring by the day and the banking industry had shown a moderate level of adaptation to AI. This study examined the implication of the usage and prospects of AI in the Nigerian banking industry. Survey research design was used for this study. The population covers members of staff of four Commercial Banks in Nigeria. The study adopted Multi stage Sampling techniques. Content validity techniques were used to validate the accuracy of the research instrument. The research findings depict that all variables are significant at 0.01 level. The results showed that adaptation of AI in the banking operation has positive implications in terms of customer satisfaction, customer retention, fraud, risk reduction and enhanced maximization. The study recommends that “enabling environment, some of which are in turn strongly influenced by larger political economic realities, especially the peculiar Artificial Intelligent setting in Nigeria is one obvious factor that need to be addressed. In conclusion, the study concluded that Artificial Intelligence in Nigeria banking industry has resulted in customer satisfaction, risk reduction and customer’s wealth maximization since Artificial Intelligence plays the role of detecting mismatch in transactions, provides personalised advisory services and developing solutions for eliminating human errors.

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Keywords: Artificial Intelligence, Banking Industry, Customers Retention, Enabling Environment, Customer’s Wealth Maximization.

I. Introduction

Millennials and their changing preferences have led to a wide scale disruption of daily processes of many industries and a simultaneous growth of many more in other sectors. Physical bank may soon be a thing of the past since the industries are adopting newer methods to match the pace of changing demands. There are lots of evident that banking is digitizing as the technology spread (Akyuz, 2021).Invariably, the banking sector today is battling to reduce inabilities and increase assets. Therefore, to provide systematic compliance management and operations, a fast track strategy is required. Artificial Intelligence (AI) is a key component of banking industries by helping to deliver affordable and dependable banking services (Zhhang, Pentina and Fan, 2021).

Artificial Intelligence (AI) is probably the defining technology of the present decade and perhaps the next (Orthman & Khatab, 2020).Today, the world is witnessing major developments in various areas of life, and in the light of the age of information and technology, many organizations cannot continue to carry out their activities without having the required artificial intelligence, as banks that do not adopt artificial intelligence can hardly achieve digital banking services (Aazhvaar, 2019). Hence, Artificial Intelligence (AI) techniques are being rapidly adopted for a new range of applications in the banking industry, especially now that industries are driven by efficiency and sustainability of growth, and the banking industry is not different in this regard (Artificial Intelligence, 2019). Sustainability of businesses is ideally based on proper decision making and artificial intelligence is unmatched in this process as it takes the human bias out of decision trees (Sarkar, Mohapatra & Sundarakrishman, 2019).
According to Alkaabi and Nobanee (2019), there is a need to automate decision making processes in a multi – facets business in order to reduce the margin of error. Therefore, Banks are adopting computer programs to enhance capabilities of business by the implementation of sophisticated artificial intelligence to curb fraudulent practices, improve customer response, offer standard customer service, enable virtual assistance to offer real time solutions and digital documentation. And the technology has come to play an integral role in a range of activities, from improving customers experience to a more efficient management of compliance, empowering banks to provide individualized frictionless customer experiences, drive customer loyalty, profitability and automate processes (John & Brendan, 2018).

According to Basson and Walters (2019) the performance of businesses is very crucial in predicting, ascertaining and evaluating the level of growth and outcomes in business organizations, and AI in today’s world is progressing rapidly with new advanced innovations over where computer systems are designed to perform some tasks. For instance, facial recognition, robotic auto driving and performance of other minor duties effectively and efficiently. The evidence of such is glaring when there is cost reduction, risk mitigation, and increasing revenues through the applications of newly capable technology in analytics (Wisskirchen, 2019).