THE ROLE OF AI IN CUSTOMER SERVICE DELIVERY IN THE

BANKING INDUSTRY (A STUDY OF GTBANK)

BY

ADAMS ABDUL-HADI KAYODE

(200821008)

A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF

BUSINESS ADMINISTRATION

FACULTY OF MANAGEMENT SCIENCES

LAGOS STATE UNIVERSITY

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE

AWARD OF BACHELOR OF SCIENCE IN BUSINESS
ADMINISTRATION

OCTOBER, 2024

i
 INTEGRITY ATTESTATION

I, ADAMS ABDUL-HADI KAYODE with matric number 200821008 hereby declared that the
research work titled “THE ROLE OF AI IN CUSTOMER SERVICE DELIVERY IN THE
BANKING INDUSTRY (A STUDY OF GTBANK)” was carried out by me under the
supervision of Prof. R.O AKEWUSOLA in the Department of Business Administration,
Faculty of Management sciences, Lagos State University, Ojo.

By signing this statement, I am attesting that this project has not been presented either in whole
or in part for award of any degree elsewhere. I have applied all the appropriate rules of quotation
and referencing in use in my faculty as well as adhere to the anti –fraud policies outlined in the
Academic regulations in the Lagos state university.

My supervisor, Department, Faculty and University are hereby indemnified by this attestation.

ADAMS ABDUL-HADI KAYODE

200821008

___________________________________
Signature & Date

ii
 CERTIFICATION

This is to certify that this project was carried out by ADAMS ABDUL-HADI KAYODE
with the matriculation number: 200821008 under the supervision of Prof. R.O AKEWUSOLA
in the Department of Business Administration, Faculty Management Sciences, Lagos State
University, Ojo Lagos.

________________________ ______________________

Prof. R.O AKEWUSOLA DATE

PROJECT SUPERVISOR

_______________________ _____________________

PROF. N.S ALAKA DATE

HEAD OF DEPARTMENT

_____________________ _______________________

EXTERNAL EXAMINER DATE

iii
 DEDICATION

This research work is honorably dedicated to the Almighty God and to my ever supporting
family.

iv
 ACKNOWLEDEMENT

To begin with, all praises and adorations belong to God, the One who has decided to show forth
His mercy upon me and also, for enabling the completion of this research project.

I would like to express my deepest gratitude to everyone who supported me throughout this

project. First and foremost, I am immensely thankful to DR. LAWAL O.R, my project

supervisor, for their valuable guidance, constructive feedback, and unwavering support. Their

insights and advice were instrumental in completing this project. I am also deeply thankful to the

former HOD of Business administration PROF. A.O ADEOYE, for his selfless dedication,

valuable time, and significant contribution and the new HOD PROF. N.S. ALAKA.

Furthermore, I extend my gratitude to my esteemed lecturers, namely Dr. Elegunde A.F, Dr.

Saka R.O, Dr. Akingbade W.A,Prof. N.S Alaka, Prof. Durowoju S.T, Prof. Akewusola R.O,Dr.

Afolayan, Mr. Osagie, Dr. Okunbanjo, Prof. Obamiro J.K, Dr. Jongbo C.O, Dr. Adelekan, Dr.

Kumolu-johnson, Dr. Lawal, Dr. Tijani A.A my very own level adviser, and all members of the

administrative staff of the department, for their support, encouragement, and guidance during my

academic journey. Without their contributions and support, this research would not have been

possible.

A very big thank you to all my friends, course mates, for always showing up at the very point of
my needs. All of your magnanimous acts cannot be forgotten in a short while.

To everyone that I did not remember to mention but has impacted my life in one way or the other
through my sojourn in the Lagos State University, thank you so much. You all are the real
MVPs.

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 ABSTRACT

Technological innovations are emerging at a rapid pace. Throughout history, these

technological advancements have increased productivity within businesses. The latest
advancements within businesses consist of automation, industrial robots and artificial
intelligence. The usage of the latter is on the rise in the last few years and is transforming the
way of working in a wide variety of different industries. One of these industries is the banking
industry. Over the years banks have always improved their methods, by applying FinTech
solutions, to differentiate themselves and to stay ahead of their competitors. Currently, the new
FinTech solution to which banks have to adapt is artificial intelligence, also known as AI. It has
the potential to improve most operations of the banks. A sample of 171, 14 Copies of the
questionnaire were not properly filled, 157 response was recovered and used to undergo the
study. Studies was taken as a result of combination of employees in GTbank. The study finds that
there is a significant effects of AI on customer satisfaction in GTbank and also AI has significant
effect on customer’s productivity in GTbank

In the dynamic realm of banking, the advent of Artificial Intelligence (AI) has catalyzed a
transformative shift, redefining the paradigms of customer service and operational efficiency.
This scholarly paper delves into the intricate interplay between AI and banking, aiming to
elucidate the multifarious impacts of AI integration within this sector. Anchored in a robust
thematic analysis and an exhaustive literature review, the study meticulously navigates through
the evolution, current applications and prospective future of AI in banking, with a particular
focus on enhancing customer experience and addressing the operational challenges. The
methodology adopted herein, comprising both qualitative and quantitative analyses, facilitates a
comprehensive exploration of AI's role in banking, unveiling its potential to revolutionize service
delivery, risk management and customer engagement.

This study recommends that GTBank should integrate AI across all customer interaction points,
including mobile apps, online banking platforms, and physical branches, GTBank should
continue to enhance AI automation in its transactional processes to improve customer
productivity.

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Keywords: Artificial Intelligence; Banking; Customer Experience; Operational Efficiency;
Ethical Considerations; Future Research.

TABLE OF CONTENT

Title page i

Integrity Attestation ii

Certification iii

Dedication iv

Acknowledgement v

Abstract vi

Table of Contents vii

CHAPTER ONE: INTRODUCTION

1.1 Background of Study 1

1.2 Statement of the Problem 3

1.3 Research Objectives 4

1.4 Research Question 4

1.5 Research Hypothesis 4

1.6 Significant of Study 5

1.7 Scope of Study 6

1.8 Definitions of Terms 7

CHAPTER TWO: LITERATURE REVIEW

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2.1 Introduction 8

2.2 Conceptual Review 8

2.1.1 Artificial Intelligence (AI) 8

2.1.2. Artificial Intelligence (Ai) In Banking 9

2.1.3 AI Technologies in Customer Service 12

2.1.5 Impact of AI on Customer Satisfaction 12

2.1.6 AI Technologies Enhancing Customer Patronage 13

2.1.7 Impact on Customer Patronage 14

2.1.8 Customer Expectation 15

2.1.9. AI and Employee Effectiveness & Customer Experience 16

2.1.10. Challenges of Artificial Intelligence 17

2.3 THEORETICAL REVIEW

2.2.1. Resource-Based View Theory 19

2.2.2. Dynamic Capability Theory 20

2.2.3. Task-Technology Fit Theory 22

2.4 EMPERICAL REVIEW 23

CHAPTER THREE: RESEARCH METHODS

3.1 Introduction 27

3.2 Research Design 27

3.3 Population of the study 27

3.4 Sample size and Sampling Techniques 27

3.5 Instrument for Data Collection 28

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3.6 Administration of Research Instrument 28

3.7 Validity of Research Instrument 28

3.8 Reliability of Research Instrument 29

3.9 Method of Data Presentation and Analysis 29

CHAPTER FOUR: DATA ANALYSIS AND RESULTS

4.0 Introduction 31

4.1 Descriptive Analysis of Demographic Information of Respondents 31

4.2 Descriptive Analysis of the Administered Research Information 32

4.3 Analyses of Respondents’ Responses 34

4.4 Test of Hypotheses 40

4.5 Discussion of findings 42

CHAPTER FIVE: SUMMARY, CONCLUSION, RECOMMENDATIONS
5.1 Introduction 44

5.3 Conclusion 44

5.4 Recommendation 45

REFERENCES 47

Appendix

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 CHAPTER ONE

INTRODUCTION

1.1 Background to the study

The evolution of customer service in the banking sector has been significantly influenced by the
advent and integration of Artificial Intelligence (AI). This transformation is rooted in the banking
industry's growing emphasis on consumer needs, particularly those of technically knowledgeable
consumers who interact regularly with cutting-edge innovations (Kumar & Gupta, 2023). These
consumers expect banks to provide seamless experiences across various operations, including
digital money transactions, e-banking, and real cash transfers. To meet these demands, financial
institutions have expanded their industrial landscape to incorporate elements from retail, IT and
telecom sectors, thereby enhancing the accessibility of banking services to consumers at any time
and from anywhere.

The integration of AI in banking has revolutionized customer service by offering personalized

banking experiences, thereby making banking operations more efficient and successful (Jaiwant,
2021). AI innovations, being an integral part of Industry 5.0, aim at harmonizing automation
with human intelligence, thus facilitating a highly personalized customer journey with banks.
This approach has not only improved service efficiency but also introduced a new era of
customer service where the focus is on delivering financial offerings seamlessly.

However, the digital transformation in the banking sector has led to increased consumer
expectations. As banks innovate their customer service offerings through virtual agents like
chatbots, it has been observed that customer engagement with these technologies is not at the
expected rate (El-Gohary et al., 2021). This discrepancy highlights the challenges banks face in
aligning their digital transformation efforts with consumer expectations and experiences.

Moreover, the application of AI in customer service has significantly contributed to the

efficiency of these services. A study conducted in a Brazilian commercial bank demonstrated
how AI, integrated with IBM's Watson system, facilitated over 181 million interactions and 7.6
million attendances in 2020 alone, thereby improving service efficiency with gains in agility,
availability, accessibility, resoluteness, predictability and transshipment capacity (De Andrade &
Tumelero, 2022). The use of chatbots, in particular, has been instrumental in reducing the queues

1
at call centers and relationship centers, allowing human attendants to focus on more complex
inquiries.

This evolution reflects a broader trend in the banking industry towards leveraging AI to enhance
customer service. By adopting AI technologies, banks are not only able to meet the growing
demands for efficiency and personalization but are also positioned to navigate the challenges
posed by digital transformation. As the banking sector continues to evolve, the role of AI in
shaping customer service strategies remains a critical area of focus, underscoring the need for
banks to adapt to the changing landscape of consumer expectations and technological
advancements.

Artificial intelligence (AI) is becoming more and more integrated into our daily lives, and banks
must employ AI at scale to stay relevant. McKinsey forecasts that AI solutions would increase
the value for the global banking industry up to $1 trillion per year. (Biswas & Carson, 2020). AI
technologies lead to increased customization of services to customers and employees, thus
boosting revenues. Automation of internal processes increases efficiency and lowers the overall
cost. The system minimizes errors with improved resource utilization. This unveils new
opportunities for improving banking processes through valuable insights.

Within a bank, many repetitive and clerical tasks are required for back-office operations. These
activities become cumbersome and take a lot of time to complete. Large volumes of chained
processes run on legacy systems. Often, many employees are found processing a single customer
request. Also, such manual processes are costly and might lead to varied or erroneous results. In
order to overcome such issues of time, cost and error, it is essential to upgrade the processes with
the latest technology. (McBride, 2019) Cloud computing, Machine Learning models and
processing huge amounts of data simultaneously, have marked way for AI solutions. NLP, a
branch of Artificial Intelligence can help banks automate tasks such as gathering customer
information and searching documents. Machine learning algorithms could reduce risk and help in
financial forecasting and cross-selling.

In addition, artificial intelligence may aid financial institutions in offering tailored suggestions,
automating mundane processes, identifying fraudulent activity, and enhancing cybersecurity
measures (Jones et al., 2022). However, the incorporation of AI into banking operations is
accompanied by a series of problems, some of which include issues over data privacy, ethical
conundrums, the need to comply with regulatory requirements, and the possibility of job
2
displacement (Davis, 2018). The thoughtful examination of these difficulties and the
development of suitable methods to address them is required in order to carry out the adoption of
AI solutions in a manner that is both effective and responsible. Understanding the effects that
artificial intelligence will have on the banking industry is very necessary if one is to take into
account the importance of the sector as well as the disruptive potential of AI. (Johnson & Smith,
2022) The purpose of this paper is to investigate and investigate the impacts that AI has on a
variety of elements of the banking industry, including customer experiences, operational
efficiency, risk management, data analytics, and regulatory compliance. [This study’s] objective
is to examine and evaluate the implications of AI on these aspects. We want to achieve our goal
of gaining insights into the potential and problems that occur as a result of the inclusion of

AI in the banking sector by conducting an in-depth examination of relevant literature, case

studies, and industry reports. This project seeks to add to the current knowledge base and give
significant insights to industry practitioners, policymakers, and academics (Smith, 2017). It will
do so by putting light on the emerging link between AI and banking. Banking institutions may
leverage on the revolutionary power of this technology and preserve their competitive advantage
in the ever changing financial market by first acknowledging the potential benefits of AI
adoption and then successfully navigating the hurdles connected with its implementation.

1.2 Statement of the problem

In recent years, Artificial Intelligence (AI) has significantly transformed customer service within
the banking industry, introducing technologies such as chatbots, virtual assistants, and predictive
analytics. This evolution promises to enhance efficiency and customer satisfaction but also
presents challenges and questions about its impact and effectiveness (Goh & Lee, 2023).

The role of AI in banking customer service involves several key aspects. First, the effectiveness
of AI tools is a major concern. Banks are keen to understand how well these AI systems handle
customer inquiries compared to traditional human service representatives, and whether they can
provide accurate and reliable responses to complex queries (Zhang et al., 2024). Second, the
impact on customer experience is critical. Research indicates that while AI can improve
satisfaction, it may still lack the personal touch of human interactions, raising questions about the
level of personalization AI can achieve (Smith & Brown, 2022).

3
Operational efficiency is another area of focus. Banks aim to leverage AI for cost reduction and
improved efficiency, yet results are mixed. Some banks report substantial benefits, while others
face integration challenges (Jansen, 2024; O'Reilly, 2023). Additionally, there are ethical and
social implications to consider. AI's role in customer service raises concerns about data privacy,
security, and potential job displacement within the sector (Nguyen, 2023; Patel & Kumar, 2024).

The problem with the prevailing and old banking device is to make your mind up based totally
on massive facts, it's far very highly-priced in time period of fee in addition to approximately
twenty to thirty percent made selections is going incorrect due to incomplete and irrelevant
information on the organizational plan. The A.I. Nation of the art system will cope with these
problems intelligently and screen all of the information associated with stakeholders to method
the reports. This A.I. Device will use actual-time information to coordinate and manual the
customer to take immediate choices and govern in keeping with the rules and policies. This
machine can even hold the profitability of the organization with the aid of growing the credit by
using carrying out a couple of customers on the identical time on the proper manner to right now
invest the money inside the banking area.

1.3 Research Objectives

The main objective is to examine the effect of artificial intelligence on organizational

performance in Gt bank.

The specific objectives are;

1. To identify the effect of AI on customer satisfaction.

2. To determine the effect of AI on customer loyalty.

1.4 Research questions

1. What is the effect of AI on customer satisfaction?

2. How does AI affect customer loyalty?

1.5 Research Hypothesis

The following hypothesis is to be tested in the course of this study:

1. H0: There’s a significant effect of AI on n satisfaction.

4
 2. H0: There’s a significant effect of AI on customer loyalty.

1.6 Significance of the study

The significance of studying the role of AI in customer service delivery in the banking industry
is multifaceted and crucial for various stakeholders involved. Here are several key points
highlighting its significance:

1. Enhanced Customer Experience: AI technologies such as chatbots, virtual assistants,

and predictive analytics can significantly enhance the overall customer experience by
providing personalized and efficient services round the clock. Understanding how AI
impacts customer satisfaction and loyalty is vital for banks striving to maintain a
competitive edge.

2. Operational Efficiency: AI-driven automation can streamline routine tasks, reducing the
workload on human employees and allowing them to focus on more complex and value-
added activities. This can lead to cost savings and improved operational efficiency for
banks.

3. Risk Management: AI algorithms can analyze vast amounts of data in real-time to detect
potential fraud or suspicious activities more effectively than traditional methods.
Understanding the role of AI in risk management is crucial for banks to safeguard their
assets and maintain trust with customers.

4. Market Differentiation: Banks that successfully leverage AI in their customer service

delivery can differentiate themselves in the market by offering innovative and cutting-
edge solutions. Understanding the impact of AI on market positioning and branding is
essential for banks to stay relevant and attract new customers.

5. Regulatory Compliance: As AI technologies become more prevalent in the banking

industry, regulators are increasingly concerned about issues such as data privacy,
algorithmic bias, and transparency. Studying the role of AI in customer service delivery
can help banks ensure compliance with relevant regulations and mitigate potential risks.

5
 6. Future Trends: Researching the role of AI in customer service delivery can provide
valuable insights into future trends and developments in the banking industry.
Understanding how AI technologies evolve and their impact on customer expectations
can help banks adapt their strategies and stay ahead of the curve.

1.7 Scope of the study

This study is focused on the role of AI in customer service delivery in the banking industry with
a peculiar reference to Gt bank. The reason for using Gt bank as a case study is based on how the
institution has been able to inculcate artificial intelligence into their operational systems.

1.8 Definition of terms

1. Artificial Intelligence (AI): Artificial Intelligence refers to the simulation of human

intelligence processes by computer systems. In the context of customer service delivery
in banking, AI encompasses technologies such as machine learning, natural language
processing, chatbots, and predictive analytics, which enable automated responses, data
analysis, and personalized interactions with customers.

2. Customer Service Delivery: Customer service delivery involves the process of providing
support, assistance, and solutions to customers before, during, and after their interactions
with a bank's products or services. It encompasses various channels such as online
banking platforms, mobile apps, call centers, and physical branches.

3. Banking Industry: The banking industry comprises financial institutions that provide
services such as deposit-taking, lending, investment, and payment services. This includes
commercial banks, investment banks, retail banks, credit unions, and other financial
intermediaries.

4. Customer Experience: Customer experience refers to the overall perception and

satisfaction level of customers based on their interactions with a bank's products,
services, and brand across different touchpoints. It includes factors such as usability,
accessibility, responsiveness, and personalization.

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 5. Chatbots: Chatbots are AI-powered computer programs designed to simulate
conversation with human users, typically through text or voice interfaces. In the banking
industry, chatbots are often deployed to provide automated customer support, answer
queries, and perform basic transactions.

6. Virtual Assistants: Virtual assistants are AI-driven applications or devices that can
perform tasks and provide assistance to users based on voice commands or text input. In
banking, virtual assistants may help customers with account inquiries, transactional
activities, or financial advice.

7. Machine Learning: Machine learning is a subset of AI that enables computer systems to

learn and improve from experience without being explicitly programmed. In the context
of banking, machine learning algorithms can analyze data to detect patterns, make
predictions, and optimize processes such as fraud detection or credit scoring.

1.9 Organization of the study

This research work is organized in five chapters for easy understanding, as follows.

Chapter one is concern with the introduction, which consist of; background to the study,
statement of the problem, research objectives, research questions, scope and limitation of the
study, significant of the study, operational definition of terms and organization of the study.
Chapter two highlights the theoretical frame work on which the theoretical framework on which
the study is based on, thus the review of related literature. Chapter three deals on the research
design and methodology adopted in the study. Chapter four concentrate on the data collection
and analysis and presentation of findings. Chapter five gives the summary, conclusion and
recommendation made on the study.

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 CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter captures the existing literatures which are the conceptual, theoretical and empirical
review.

2.1. Conceptual Framework

2.1.1 Artificial Intelligence (AI)

Artificial Intelligence (AI) has become a pivotal force of change in numerous industries, with the
banking sector experiencing one of the most profound impacts of this technological
advancement. The integration of AI into banking represents a deliberate and strategic shift
designed to boost operational effectiveness, enhance customer experiences and drive financial
innovation. Lazo and Ebardo (2023) examine the future potential of AI within the banking
industry, highlighting its critical role in streamlining and enhancing financial operations for both
individuals and businesses. This shift towards automation, facilitated by advanced self-learning
AI systems, marks the dawn of a new banking era dominated by AI and machine learning
technologies, which are essential in defining the trajectory of financial services.

The origins of AI date back to 1956, highlighted by the groundbreaking contributions of John
McCarthy among others, who proposed the idea of machines capable of undertaking activities
usually necessitating human intelligence, including reasoning, learning, and solving problems, as
noted by Shalet and Thangam (2023). This initial concept of AI, defined as the ability of digital
computers or robot-controlled mechanisms to perform tasks intelligently, has facilitated its

8
adoption in the banking industry. This integration has led to considerable transformations,
shifting the sector towards a more customer-focused and technologically sophisticated direction.

One of the most notable applications of AI in banking is the development and deployment of
chatbots, which have revolutionized the way banks interact with their customers. Suhel et al.
(2020) examine the transition from conventional conversation to automation in banking through
chatbots, utilizing artificial machine intelligence language. This shift has not only changed the
face of customer interactions but has also played a crucial role in the development of the banking
sector, underscoring the importance of AI in meeting the ever-changing needs of customers.

The integration of AI in banking has led to a myriad of benefits, including improved efficiency
in financial transactions, enhanced customer service through personalized experiences, and the
ability to perform complex problem-solving tasks. These advancements underscore the banking
sector's commitment to leveraging AI for strategic development and operational excellence.
However, the journey of integrating AI into banking also presents challenges, such as ensuring
the security of financial transactions and addressing the ethical considerations associated with AI
technologies.

As the banking sector continues to navigate the complexities of AI integration, the focus remains
on harnessing the potential of AI to create more innovative, efficient and customer-friendly
banking solutions. The ongoing evolution of AI in banking not only reflects the sector's
adaptability to technological advancements but also its dedication to meeting the dynamic needs
of consumers in the digital age. The future of banking, therefore, lies in the strategic
development and application of AI technologies, which promise to redefine the banking
experience for individuals and businesses alike.

2.1.2. Artificial Intelligence (Ai) In Banking

The banking sector has witnessed a significant transformation with the advent of Artificial
Intelligence (AI), marking a new era of personalized banking and operational efficiency. AI's
integration into banking is not just about automating routine tasks but about redefining the
customer experience and enhancing the security of financial transactions. Jaiwant (2022)
highlights how AI has revolutionized personalized banking, making financial services more
customer-centric by delivering seamless financial offerings. This evolution towards AI-driven

9
banking is part of the broader movement towards Industry 5.0, which seeks to integrate
automation with human intelligence, thereby facilitating a highly personalized customer journey.

AI's role in combating cyber threats in banking and financial services is another critical area of
its application. Dhashanamoorthi (2023) discusses the dual nature of AI in banking, noting its
potential to enhance personal data protection, fraud detection, and customer behavior analysis,
while also acknowledging the challenges it poses, such as high costs, unemployment,
cybercrime, and issues related to transparency and explainability. The paper suggests that
overcoming these limitations requires ethical design, regulation, education and human oversight,
underscoring the need for a balanced approach to AI integration in banking.

The study conducted by Mardanghom and Sandal (2019) investigates the role of AI in the
evolution of banking practices in India from conventional methods to digital platforms. Utilizing
data gathered from bank staff, their research illustrates the profound influence of AI on different
aspects of banking, such as chatbots, robo-advisors, predictive analytics, cybersecurity, and
credit assessment. The deployment of AI technologies in these areas not only boosts efficiency
and competitive edge but also propels the digital overhaul of the banking sector.

Jain (2022) focuses on the challenges of applying AI in the banking sector, emphasizing the need
for effective protective measures against a wide range of vulnerabilities, especially in web
applications critical to banking operations such as web banking and online shopping. The study
highlights that while AI can drastically change business processes and customer interactions, it
also requires careful consideration of security and ethical issues.

The current applications of AI in banking are diverse, ranging from enhancing customer service
through personalized experiences to improving the security of financial transactions and
combating cyber threats. As banks continue to navigate the digital transformation, AI stands out
as a key technology driving innovation and efficiency in the banking sector. However, the
successful integration of AI in banking also depends on addressing the challenges it presents,
including ethical considerations, transparency, and the need for human oversight. The future of
banking, therefore, lies in leveraging AI's potential while ensuring the security, fairness and
transparency of its applications.

Cash Deposit Machine: The Cash Deposit Machines are self-service terminals which allow
depositing cash at any time. This facility ends the problem of standing in long queues at banks to

10
deposit cash. Banks offer the fastest and most reliable way to deposit cash round the clock. Both
state-owned and private banks offer this facility where account balance is credited instantly.
Customer will receive a transaction receipt for each successful transaction. Payments can also be
made in different accounts using this machine.

ATM Machine Helpline: These helps the customers to contact their respective banks in case of
emergency these helplines are provided in ATMs. AI has been introduced in ATMs too. The
following segments have been introduced in ATMs: Machine learning for cybersecurity in
ATMs, machine vision ATM cameras, facial recognition for security and improving customer
experience, predictive maintenance of ATM machines, forecasting ATM cash demand.

Mobile Banking: Mobiles are becoming smarter globally. Millions of people depend vigorously
on mobile banking, which means that AI-powered banking mobile apps strongly attract them.
Consumers have moved to mobile banking effortlessly. Having personal virtual assistant is very
attractive no matter whether it is Siri from Apple or Alexa from Amazon. It has been widely
accepted and welcomed by users across the globe. Mobile apps can readily meet the client’s
desires. There are intelligent apps that can track the user’s behaviors and give those customized
tips and insights on savings and expenses. Nowadays every bank offers these services of mobile
and text banking. With the use of mobile banking it has become more convenient to do daily
transactions such as money transfer, payments etc. Consumers can do better financial planning,
can get smart financial advisory, can do efficient and quicker transactions with the advent of
artificial intelligence in mobile banking.

Blockchain Technology and Banking: Blockchain is distributed, decentralized and digital

ledger. It is digital information (block) stored on public database (chain). Blockchain is used to
store encrypted data and Artificial Intelligence is the brain or engine to enable decision making
and assists in analysis of data collected. Most often it is argued that blockchain technology is
only beneficial for cryptocurrency industry but that is not true. Blockchain technology visions to
solve multiple issues related to digital transactions such as data security, fraud prevention etc.
Blockchain is the future of inter-bank transactions, cross border remittances, crypto banking,
record storing, KYC, loan syndication, increased transparency to name a few.

AI-based Algorithms and Fraud Detection: AI revolves around algorithms. Machine learning
is made up of series of algorithms. Algorithm is a set of rules, instructions or other problem-
solving operations to be followed by computers. AI is very effective in finding patterns in real
11
time. It uses additional behavioural indicators to spot suspicious activity and offer suggestions
for mitigating risk. For instance, Feedzai, a data science firm, uses algorithms to detect e-
commerce fraud.

2.1.3 AI Technologies in Customer Service

Chatbots and Virtual Assistants

AI-powered chatbots and virtual assistants have revolutionized customer service by providing
instant, 24/7 support. These tools use natural language processing (NLP) to understand and
respond to customer queries efficiently. Research indicates that chatbots can handle up to 80% of
routine customer interactions, freeing human agents to tackle more complex issues (Chung et al.,
2018). For example, the implementation of chatbots by companies like H&M has led to
improved response times and increased customer satisfaction (Luo et al., 2020).

Predictive Analytics

Predictive analytics leverages AI to analyze historical data and forecast future customer needs.
This capability allows businesses to tailor their marketing strategies and product offerings more
effectively. Studies show that predictive analytics can significantly enhance customer
satisfaction by providing personalized experiences and proactive service (Boehm et al., 2019).
For instance, Netflix's recommendation engine, powered by AI, has been pivotal in driving user
engagement and satisfaction (Gomez-Uribe & Hunt, 2016).

Sentiment Analysis

AI-driven sentiment analysis tools process customer feedback and social media interactions to
gauge overall sentiment and identify emerging issues. Research has demonstrated that sentiment
analysis can improve customer satisfaction by enabling companies to address negative feedback
more promptly and accurately (Liu et al., 2015). Companies like Amazon utilize sentiment
analysis to fine-tune their customer service strategies and product offerings based on customer
sentiments expressed online (Pang & Lee, 2008).

2.1.5 Impact of AI on Customer Satisfaction

Improved Efficiency
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AI technologies have markedly improved service efficiency by reducing response times and
managing large volumes of interactions. Research highlights that AI-driven tools can resolve
customer issues more swiftly than traditional methods, leading to higher satisfaction levels
(Pereira et al., 2020). For instance, AI's role in automating routine tasks at companies like IBM
has led to noticeable improvements in service efficiency and customer satisfaction (Zhao et al.,
2019).

Personalization

AI enhances personalization by analyzing customer data to provide tailored interactions and

recommendations. Studies show that personalized experiences significantly boost customer
satisfaction by making interactions more relevant and engaging (Kumar et al., 2019). The use of
AI for personalized marketing at companies like Spotify has been shown to increase user
satisfaction by delivering content that aligns with individual preferences (Elahi et al., 2019).

Accuracy and Reliability

The accuracy and reliability of AI systems are critical for maintaining customer trust and
satisfaction. Research indicates that AI systems with high accuracy in responding to queries and
providing reliable service contribute positively to customer satisfaction (Wang et al., 2017). For
example, the deployment of AI in fraud detection by banks has improved service reliability and
customer trust (Ngai et al., 2011).

2.1.6 AI Technologies Enhancing Customer Patronage

Personalization Algorithms

Personalization algorithms are central to AI's role in boosting customer patronage. These
algorithms analyze customer data to deliver tailored experiences, influencing customers' repeated
interactions with a brand. Research shows that personalized experiences can significantly
enhance customer loyalty and increase the likelihood of repeat purchases (Arora et al., 2008).
For instance, Amazon's recommendation engine, which leverages AI to suggest products based
on browsing history and past purchases, has been linked to increased customer retention and
higher patronage rates (Smith, 2021).

13
Customer Segmentation

AI-driven customer segmentation involves analyzing data to group customers based on their
behavior, preferences, and demographics. This segmentation allows businesses to target
marketing efforts more effectively, leading to improved customer engagement and increased
patronage. Studies demonstrate that targeted marketing strategies based on AI segmentation can
enhance customer loyalty and drive repeat business (Wedel & Kamakura, 2012). For example,
Netflix uses AI to segment its audience and tailor content recommendations, fostering higher
levels of customer engagement and long-term patronage (Gomez-Uribe & Hunt, 2016).

Dynamic Pricing

Dynamic pricing, powered by AI, adjusts prices in real-time based on demand, competition, and
customer behavior. This strategy can attract and retain customers by offering competitive prices
and personalized deals. Research indicates that dynamic pricing can improve customer
satisfaction and loyalty by providing value-driven pricing options (Elmaghraby & Keskinocak,
2003). Airlines and e-commerce platforms frequently use AI-driven dynamic pricing to maintain
competitive advantage and encourage repeat patronage (Chen et al., 2009).

Predictive Analytics

Predictive analytics uses AI to forecast future customer behaviors based on historical data. By
anticipating customer needs and preferences, businesses can proactively address issues and
enhance customer experiences, leading to increased patronage. Studies highlight that predictive
analytics can significantly boost customer loyalty by enabling proactive engagement strategies
(Boehm et al., 2019). For example, predictive analytics allows retailers to anticipate inventory
needs and tailor promotions, which can drive repeat purchases and customer loyalty (Grewal et
al., 2016).

2.1.7 Impact on Customer Patronage

Enhanced Customer Experience

14
AI technologies contribute to a superior customer experience by enabling personalized
interactions and timely responses. Research shows that an improved customer experience, driven
by AI, can lead to higher levels of customer patronage (Kumar et al., 2019). For instance, AI-
powered chatbots that provide quick and accurate responses can enhance customer satisfaction,
fostering repeated interactions and loyalty (Luo et al., 2020).

Loyalty Programs

AI enhances the effectiveness of loyalty programs by analyzing customer data to offer tailored
rewards and incentives. Studies indicate that personalized loyalty programs, driven by AI
insights, can increase customer retention and encourage repeat patronage (Harris & Dennis,
2018). Companies like Starbucks use AI to tailor their loyalty rewards based on customer
preferences, resulting in increased engagement and patronage (Lemon & Verhoef, 2016).

Customer Retention

AI technologies play a crucial role in customer retention by predicting churn and identifying
opportunities to re-engage at-risk customers. Research demonstrates that AI-driven retention
strategies, such as personalized outreach and targeted offers, can effectively reduce churn and
increase patronage (Hwang & Namkung, 2018). For example, telecom companies use AI to
identify customers likely to leave and implement retention strategies to maintain their patronage
(Yen et al., 2016).

2.1.8 Customer Expectation

Modern customers have become more empowered, less patient, and they now demand more
from the businesses they interact with, including their banking 26 Turku University of Applied
Sciences Thesis | Michel Cedersund institutions (Carpenter, 2020). Today's customers, who are
accustomed to the service standards set by consumer internet companies, have raised their
expectations. They now anticipate a similar level of consistency, convenience, and
personalization from their financial-services institutions (McKinsey & Company, 2020). the
emergence of challenger banks and the continuous influx of fintech companies joining the
market has resulted in customers being presented with abundant options. As a consequence, their
expectations regarding the customer experience have been permanently elevated. (Retail Banker
International, 2022.) Moreover, the Big Tech companies consistently set higher standards to user
15
experience, and users are well aware of what constitutes a superior experience. As a result, their
expectations are on the rise, and they demand services that cater to their individual requirements.
Hence, customers now demand that banks demonstrate a deep understanding of their unique
needs and preferences, and they expect to receive personalized and seamless experiences.
(McCumber, 2021.) At the moment, many customers view their relationship with their bank as
nothing more than a transactional one, akin to the relationships they have with utility companies
like electricity or water providers. However, given the wealth of data and insights that banks
possess about their customers, they should be leveraging this information to engage with their
customers more frequently and provide them with valuable advice and information that goes
beyond basic transactions. For example, a bank could offer a home purchase package that
combines an appropriate mortgage, home insurance, and furnishing loan, or a car purchase
package that includes financing, insurance, and breakdown cover. (Carpenter, 2020.) Moreover,
the utilization of AI holds the potential to provide customized services (Vijai, 2019) and by
leveraging AI technology and machine learning, banks can employ specific algorithms to analyse
and forecast customer behaviour, enabling the development of customized plans, and aligning
with customer expectations (Noreen, Shafique, Ahmed & Ashfaq, 2023

.2.1.9. AI and Employee Effectiveness & Customer Experience

Artificial intelligence improves employee effectiveness and complements purchaser revel in via
focused emails and other offers, It increases sales, It will increase the productivity of sales reps,
AI gives greater precision & accuracy, From coins transfer to bills price, cards control, and other
help, AI can enrich the pride stage of your clients, All of those operations may be without
problems controlled through desktops, clever phones, and other cell devices.

Identification of Fraudulent Transactions

The finance industry is harnessing device studying to decrease operational costs & power
profitability, this subject includes both the front-and back-office activities throughout multiple
institutions, Machine getting to know algorithms can analyze hundreds of statistics points in real
time and flag suspicious or undeniable-right fraudulent transactions, stopping many fraudulent
claims inside the process.

Increase in Efficiency, Accuracy

16
Artificial intelligence increase performance, accuracy, and pace of mathematical calculations, it
may deal with big quantities of records, banks can find the quality mixture of the preliminary
margin reducing trades at a given time primarily based on the degree of initial margin reduction
in the past below specific combinations of those trades.

Better Customer Support

Several portions of evidence suggest that the clients willingly pick self-carrier alternatives which
allow them to speak with a digital assistant as if it have been a live consumer consultant. Most
leading banks have already brought digital assistants to their immediate internet site chat bots,
voice response structures, and cell packages. Artificial Intelligence considers every interplay as a
teachable moment, so the chat bots (digital assistants) continues getting higher whilst know-how
customers.

2.1.10. Challenges of Artificial Intelligence

❖ Not everyone understands what AI is: To implement AI into the banking sector, one must be
well informed of its capabilities and limitations, as well as the benefits and drawbacks. To be
honest, most people have no idea what technology is or how to cope with numerous banking
issues. When one hears the word "intelligence," the most common image that comes to mind is
of robots taking over humanity. The problem is that AI technology is being misunderstood,
which is limiting its adoption in many businesses. People must educate themselves about the
problem of AI and its current use to fix it. And perhaps a little, but technology will undoubtedly
begin to unlock doors in our life.

❖ Computer power: The amount of power that these algorithms demand is one element that
drives many developers away. Machine learning and in-depth learning are the foundations of
Artificial Intelligence, and they require an increasing number of cores and GPUs to function
successfully. Asteroid tracking, health deployment, cosmic body tracking, and other domains
where we have the ideas and knowledge to employ in-depth learning frameworks are just a few
examples. They necessitate the processing capacity of a supercomputer, and yes, these computers
are inexpensive. They do, however, come at a cost, owing to the availability of creators of Cloud
Computing processing systems and programmes that function in tandem with AI systems with
tremendous success.

17
❖ Lack of Trust: The uncertain nature of how deep learning models predict the result is one of
the most fundamental elements that cause concern for AI. For the average person, understanding
how a precise collection of inputs might build a solution to several problems is tough. The
majority of people on the planet are unaware of the use or presence of artificial intelligence, and
how it is interwoven into common items such as smartphones, smart TVs, banking, and even
automobiles (at some level of automation).

❖ Information is scarce: Although there are numerous instances where Artificial Intelligence can
be a better alternative to traditional technologies on the market. The underlying issue, however,
is that -Artificial Intelligence is not well-known. Only a few people, aside from technology
enthusiasts, college students, and academics are aware of AI's potential. Many SMEs (Small and
Medium Businesses) can, for example, organise their work or learn new ways to extend their
product, manage resources, sell and manage things online, learn and understand consumer
behaviour, and respond to the market effectively and efficiently. They are also unaware of
technology service providers such as Google Cloud, Amazon Web Services, and others.

❖ The level of the individual: This is one of AI's most difficult problems, and it has kept
academics on the cutting edge of AI services in businesses and startups. These firms may boast
of the accuracy of more than 90%, yet in all of these cases, people can perform better. To
execute the same task with an in-depth learning model, it would take extraordinary funding, the
usage of a hyper parameter, a vast database, and a well-defined and accurate algorithm, as well
as powerful computer power, continuous training in train data, and testing on test data. That
sounds like a lot of effort, and it's a hundred times more difficult than it appears. ❖ Data privacy
and securityIt is critical because all deep learning models and robots rely on data and training
resources. Yes, we have data, but because it is generated by millions of users around the world, it
may be utilized for nefarious purposes.

❖ Grieving Issues: The amount of data used to train an AI system determines whether it is good
or terrible. As a result, the ability to obtain good data is a potential answer for good AI
programmes. But, in reality, the day-to-day data collection organisations are tedious and useless.
❖ Lack of data: With large corporations like Google, Facebook, and Apple facing charges for
illegally utilising user data, governments like India are enforcing tight IT rules to limit travel. As
a result, these businesses are now faced with the challenge of exploiting location data to create
worldwide applications, which may result in overpopulation. Labelled data is used to educate

18
equipment to read and make predictions, which is an important part of AI. Some businesses are
attempting to innovate by concentrating their efforts on developing AI models that can offer
correct results despite a dearth of data. With skewed data, the entire system may be flawed.

2.2. Theoretical Review

For the purpose of this study, the theories under consideration are; Resource-Based View (RBV)
Theory, Dynamic Capabilities Theory, and Task-Technology Fit (TTF) Theory.

2.2.1. Resource-Based View Theory

The RBV theory posits that an organization's resources, including its tangible assets, intangible
assets, and organizational capabilities, can be leveraged to gain a competitive advantage and
improve its performance (Luján Salazar, 2017). An organization's tangible assets may include its
physical facilities and equipment, while its intangible assets may include its brand reputation and
intellectual property. Its organizational capabilities may include its ability to effectively manage
and coordinate its resources, as well as its ability to innovate and adapt to changes in the
environment (Utami & Alamanos, 2022). The theory also suggests that an organization's
resources and capabilities must be valuable, rare, inimitable, and non-substitutable in order to
provide a sustained competitive advantage. This means that the resources and capabilities must
provide a unique benefit to the organization and be difficult for competitors to imitate or
replicate (Madhani, 2010).

One of the key contributions of the RBV theory is its emphasis on the importance of considering
an organization's internal resources and capabilities when developing strategic plans and making
decisions (Sabourin, 2020). This perspective is in contrast to traditional strategic management
theories, which focus on external factors such as market conditions and competition. Relevant
research on the RBV theory has found that an organization's resources and capabilities can
indeed have a significant impact on its performance (Luján Salazar, 2017). Studies have shown
that organizations with strong brands, well-coordinated resources, and effective innovation
processes tend to have better financial performance and higher levels of customer satisfaction
compared to organizations with weaker resources and capabilities (McGee, 2015).

19
However, the RBV theory is not without its criticisms. Some researchers have criticized the
theory for being overly deterministic and for not adequately considering the role of external
factors in shaping an organization's performance (Beamish & Chakravarty, 2021). Additionally,
some have argued that the theory does not provide a clear framework for determining which
resources and capabilities are most important for providing a sustained competitive advantage
(Pankaj M Madhani, 2014). The Resource-Based View (RBV) theory has a direct relationship to
AI and organizational performance, as AI can be considered as a resource or capability that
organizations can leverage to improve their competitiveness and performance. According to the
RBV theory, an organization's resources and capabilities must be valuable, rare, inimitable, and
non-substitutable in order to provide a sustained competitive advantage (Chigara, 2021).

In conclusion, the Resource-Based View (RBV) theory provides a valuable perspective for
understanding the relationship between AI and organizational performance. AI can be considered
as a valuable resource that can provide organizations with a sustained competitive advantage,
and organizations must carefully manage and coordinate their AI resources in order to fully
realize the benefits of AI (Sabourin, 2020). The theory provides a framework for considering the
internal factors that shape an organization's performance and highlights the importance of
considering an organization's resources and capabilities when making strategic decisions. While
the theory is not without its criticisms, it remains a widely researched and influential perspective
in the field of management (Utami & Alamanos, 2022).

2.2.2. Dynamic Capability Theory

The Dynamic Capability Theory (DCT) is a framework developed by David J. Teece in the late
20th century, which provides a comprehensive understanding of how organizations can develop
and renew their capabilities over time to respond to changes in their environment and achieve
superior performance (Gremme & Wohlgemuth, 2017). The theory highlights the importance of
dynamic capabilities in enabling organizations to continuously improve and adapt to changing
circumstances (El Gizawi, 2014). Dynamic capability theory is a widely researched field in
strategic management and organization studies. The theory suggests that firms' success in
adapting to changes in their environment is not solely dependent on their resources and
capabilities, but also on their ability to learn, integrate, and reconfigure their internal and external
resources to meet new challenges and opportunities (Bleady, Hafiez, Hasaballa & Ibrahim,
2018).

20
Dynamic capabilities refer to a firm's processes and routines that allow it to effectively respond
to changing market conditions and shifts in its environment. The theory highlights the
importance of a firm's capacity to continuously improve, innovate, and create new capabilities
(Samsudin & Ismail, 2019). The concept of dynamic capabilities emphasizes that firms need to
continuously monitor and assess their environment to identify opportunities for improvement and
make necessary changes to their operations, resources, and capabilities. Dynamic capability
theory is closely related to the resource-based view of the firm, which suggests that a firm's
unique resources and capabilities provide a source of sustained competitive advantage (Gremme
& Wohlgemuth, 2017). However, the dynamic capability theory goes beyond the resource-based
view by emphasizing the importance of a firm's ability to dynamically change its resources and
capabilities in response to changes in the environment (Teece & Pisano, 2019).

The theory of dynamic capabilities has several key components, including the processes of
learning, integration, and reconfiguration. Learning refers to the processes by which a firm
acquires new knowledge and insights about its environment, customers, and competitors (El
Gizawi, 2014). Integration involves combining and coordinating the internal and external
resources of the firm to create new capabilities and meet new challenges. Reconfiguration refers
to the processes by which a firm can change its operations and structures to align with its new
capabilities. Dynamic capability theory has important implications for firms and organizations,
highlighting the need for continuous improvement, innovation, and adaptation (Samsudin &
Ismail, 2019). The theory suggests that firms need to develop flexible structures and processes
that allow them to respond quickly to changes in their environment and continuously improve
their capabilities. In addition, the theory emphasizes the importance of a firm's culture and
leadership in fostering a dynamic and adaptive organizational environment.

Overall, dynamic capability theory provides a useful framework for understanding how firms can
create and maintain a competitive advantage by continuously improving and adapting to changes
in their environment (Bleady, Hafiez, et al., 2018). The theory highlights the importance of
learning, integration, and reconfiguration in enabling firms to remain competitive and successful
over the long term.

In the context of AI and organizational performance, DCT emphasizes the significance of

developing dynamic capabilities to leverage AI effectively. As AI is a rapidly evolving
technology, organizations must be able to continuously adapt to the changing AI landscape in

21
order to reap its full benefits, such as increased efficiency, improved decision-making, and
greater competitiveness (El Gizawi, 2014).

According to DCT, organizations must develop and cultivate dynamic capabilities, including the
ability to sense changes in the environment, the ability to transform existing processes and
structures, and the ability to reconfigure resources to meet new challenges (Teece & Pisano,
2019). Organizations must also foster a culture of continuous learning and innovation, and be
able to quickly and effectively integrate new AI technologies and processes into their operations.
The Dynamic Capability Theory provides a valuable perspective for understanding the
relationship between AI and organizational performance (Doval, 2020). It highlights the
importance of developing dynamic capabilities to leverage AI effectively and to continuously
improve organizational performance in the face of a rapidly changing environment.

Moreover, DCT also highlights the role of strategic management in enabling organizations to
develop the necessary dynamic capabilities to leverage AI. Strategic management involves
assessing the organization's current capabilities, identifying gaps and opportunities for
improvement, and developing strategies to acquire or develop the necessary capabilities. This
can involve investing in training and development programs for employees, as well as acquiring
new technologies or partnering with other organizations to leverage their expertise (Arinez et al.,
2020). Furthermore, DCT also recognizes the role of top management in driving the
development and renewal of dynamic capabilities. Top management must provide clear direction
and support for the development of AI capabilities, and create an organizational culture that
supports continuous learning and innovation (Gremme & Wohlgemuth, 2017). This can involve
setting clear goals and objectives, investing in the necessary resources, and providing the
necessary support and incentives to encourage employees to embrace and leverage AI
technologies.

Despite its strengths, the Dynamic Capability Theory has also been criticized for its limited focus
on the role of resources and capabilities in organizational performance (Bleady et al., 2018).
Some argue that it fails to fully consider the role of external factors, such as market forces and
competition, in shaping organizational performance (Arndt et al., 2022). Additionally, some
argue that the theory shaping organizational performance (Arndt et al., 2022). Additionally, some
argue that the theory may not fully capture the complexities of real-world organizational
situations, and that it may oversimplify the development and renewal of dynamic capabilities

22
(Collis & Anand, 2018). In conclusion, the Dynamic Capability Theory provides a valuable
framework for understanding the role of AI in shaping organizational performance. However,
like any theory, it has its limitations and criticisms, and it is important for organizations to
consider a range of perspectives when developing strategies to leverage AI and improve
organizational performance.

2.2.3. Task-Technology Fit Theory

The Task-Technology Fit (TTF) theory is a widely researched framework in the field of
information systems and management. It was first developed by James D. Scott and Mark A.
Brickman in the late 1980s (Vendramin Nardelli & Ispen, 2021). It has since been widely
researched and applied in the field of information systems and management, and has become a
well-established framework for understanding the relationship between technology and task
performance.

It seeks to explain how the match between the characteristics of a technology and the
characteristics of the task it is being used for can impact the effectiveness and efficiency of
technology use (AlRahmi et al., 2020). The TTF theory suggests that the better the fit between
the task and technology, the higher the level of performance that can be achieved. It is based on
the premise that technologies are not neutral and that their impact on task performance is
influenced by their characteristics and the characteristics of the task. It argues that the fit between
the task and technology can be improved through the careful design and selection of technologies
that are well-suited to the specific task requirements (Gebauer & Shaw, 2014).

The Task-Technology Fit (TTF) theory, which seeks to explain the relationship between the fit
between technology and task and its impact on performance, has received some criticism over
the years. One criticism is the limited empirical support for the theory, with limited studies
providing strong evidence for its validity. Another criticism is its inadequacy in accounting for
task complexity, which can vary greatly and have a significant impact on the fit between task and
technology (Vendramin et al., 2021). The TTF theory also ignores the influence of other factors,
such as user role and organizational culture, and relies heavily on subjective measures of fit,
which can be subject to and organizational culture, and relies heavily on subjective measures of
fit, which can be subject to bias and inaccuracies (Gebauer & Shaw, 2014).

2.4 Empirical Review

23
According to a survey conducted by McKinsey & Company, AI adoption is still in its early
stages in most businesses. Only 8% of respondents reported that their organizations have
deployed AI at scale, while 23% reported that their organizations are piloting or experimenting
with AI. The survey also found that the most significant barrier to AI adoption is the lack of
understanding of the technology and its potential applications.

Financial Stability Board (2017) conducted a study on the implication of artificial intelligence
and machine learning on financial service market development. The study was done in 6325
companies in 18 European countries. The companies were selected using convenience sampling
technique and quasi-experimental research design was adopted in the study. Data for the study
were generated through a questionnaire sent to the respondents by e-mail. Although 6325
questionnaire were administered in the study, 135 copies representing 2.13% were not
retrievable. The data were analysed with using chisquare statistical technique. It was found in the
study that artificial intelligence and machine learning are being rapidly adopted for a range of
applications in the financial service industry, which has drastically brought about market and
product developments in the sector. It was recommended that financial service firms in the
selected European countries should ensure the sustainability of artificial intelligence in their
domain. This study is closely related to our study as its provide empirical evidence relevant
theory building in establishing the relationship between artificial intelligence and diversification.

Cockburn, Henderson, & Stern (2017) investigated the effect of artificial intelligence on
innovation in Toronto, USA. A longitudinal research design was adopted in the study, and the
population is made up of 56 companies drawn from different industries. Data were collected
through a questionnaire that was administered on General Managers of the selected companies.
Before the administration of the questionnaire, it was tested for a face and content validity and its
reliability was tested with a test retest technique using Kendall coefficient of concordance. The
data were analysed with Spearman’s rank coefficient of correlation, which revealed a value of
0.84. From the findings, it is concluded that artificial intelligence promises both to improve
existing goods and services, and, by enabling the automation of many tasks, to greatly increase
the efficiency with which they are produced, thereby resulting in market development. This
study is closely related to our study as its provides empirical evidence relevant for theory
building in establishing the relationship between artificial intelligence and diversification in
developing new product or market.

24
Morikawa (2016) did a study on artificial intelligence (AI) and their impacts on future business.
The population of the study comprised 3000 Japanse companies through a survey research
design. The data for the study were generated through a well-structured questionnaire designed
in modified 5 point Likert scale of strongly agree, agree, disagree, strongly disagree, and
indifferent. The data were analysed using frequency, mean, and standard deviation, while the
impact was tested using the ordinary least square (OLS) regression analysis. The major findings
show that Japanse firms are positively affected by AIrelated technologies, as this has contributed
to the diversification of their business. This study is closely related to our study as its provides
empirical evidence relevant for theory building in establishing the relationship between artificial
intelligence and diversification in developing new product or market.

Salfano and Robert (2014) investigate the relationship between artificial intelligence and market
share in selected companies in Sri Lanka. With the use of a survey research design, 89
companies were involved in the study, and data were collected through a questionnaire
administered on the marketing managers of the companies. The data for the study were analysed
with simple mean and hypotheses were tested with t-test. The findings from the study revealed
that artificial intelligence impacts significantly on the market share of companies, and
recommended the adoption of artificial intelligence in Sri Lanka companies. This is very related
to the present study as its has demonstrated the relationship between artificial intelligence and
market share.

Gale (2011) investigated the predictive power of artificial intelligence for business expansion in
new industries in New Jesery, United States of America. 76 companies were selected for the
study and a cross sectional survey research design was adopted. Based on qualitative data
generated from the study through an unstructured questionnaire administered on marketing
managers of the companies, it was revealed that artificial intelligence offers opportunity to
automate processes or make them more efficient, create personalized products, and predictive
maintenance functions, which are capable for expanding the business. This study is related to our
study as its provides empirical basis for testing the hypotheses in our study.

IsHaK (2010) also conducted an empirical investigation on artificial intelligence and competitive
advantage measured by market share of US companies. Questionnaire instrument was used to
elicit responses from 105 firms from Business Week’s America’s 1000 most valuable
companies. A quasi experimental design was adopted in the study and data were analysed with

25
Spearman’s rank correlation coefficient. Findings of the study indicate that better
performing firms gain a competitive advantage by using artificial intelligence technologies.

Oke (2008) did an empirical review on the effect of artificial intelligence on firm performance in
Nigeria. Three cities in Nigeria were considered for the study, namely Lagos, Kano, and Port
Harcourt. A total of 169 service firms and 87 manufacturing companies formed the population of
the study. The data were collected through the administration of a questionnaire designed in 5-
point Likert scale on the chief executive officers of the chosen companies. The data were
analysed using the t-test for independent samples. It was revealed that artificial intelligence have
greatly improved performance of both

Ibekwe W. & Helen O. manufacturing and service systems. He further revealed that the
application of artificial intelligence technologies in Nigerian banks is the key factor for banks
expansion in the 21st century. The implication of this study is that it provides empirical evidence
that our study can rely on. Koonce and Tai (2007) conducted a study titled “data mining and
market behavior. The purpose of the study is to apply data mining to assist managers in
understanding customers’ behavior. The researchers developed a software tool called DBMine
using Bacons algorithm and applied it to finding pattern in customer scheduling generated by
genetic algorithm. The study was conducted in Jordan using 36 companies selected through
convenience sampling technique. The data for the study, which were analysed with simple
percentage, were generated through observation method. The findings revealed that data mining,
which is a dimension of artificial intelligence, is useful to managers for predicting customers’
behavior, and this has brought about increase in the companies’ market share. Data mining was
therefore recommended for use among companies in Jordan. The implication of this study is that
it provides empirical evidence related to our study. Bolloju (2002) did an empirical study on the
impact of integrated online analytical system artificial intelligence software) on market share of
commercial banks in New Zealand. The study covers a period of five years from 1997-200.
Panel data were generated from the study from the records of the banks, which were analysed
with the ordinary least square (OLS) regression technique. The findings show r-squared of 0.72,
which means that an application of the software (integrated online analytical system) brings
about 72% changes in market share of the selected banks. This is closely related to the present
study as it has demonstrated the relationship between artificial intelligence and market share.

26
 Thearling (1998) conducted a study on increasing customer satisfaction with artificial
intelligence in the US market. A cross sectional survey research design was used in the study
involving 5110 customers drawn through stratified random sampling technique from the New
York City. The data were analysed with frequency and simple percentage. The findings indicate
that artificial intelligence improves customer loyalty and increase in market share. It was
therefore recommended that organizations use predictive algorithms to provide their customers
with suggestions of products they enjoy. This is much related to the present study as it has
demonstrated the relationship between artificial intelligence and market share.

27
 CHAPTER THREE

RESEARCH METHODS

3.0 Introduction

This chapter considered the research design, population of the study, sampling size and
techniques, instrument for data collection, administrative of research instrument, validity and
reliability of research instrument and method of data analysis.

3.1 Research Design

Research design is the framework of research methods and techniques chosen by a researcher to
conduct a study. The Study adopted the survey research in evaluating The Role of AI in
Customer Service Delivery in the Banking Industry (A Study of Gt bank). Primary source of data
was used in the course of this study. A well-planned research design helps ensure that your
methods match your research aims and that you use the right kind of analysis for your data.
3.2 Population of the Study

The population of this study comprised of the staff of Gt Bank Plc. in Lagos state with the
population of study is 300 staff. This was a compilation of the top management, middle
management and the lower management who work remotely in some of the branches of the
organizations.

3.4 Sample Size and Sampling Technique

A sample is a specific group that you will collect data from. The size of the sample is always less
than the total size of the population. It is an examination of part of a population to interfere with
the population and it is defined as a selected part of a population obtained with the investigating
parameters.

Nevertheless, in this particular research study, the researcher is using the Taro-Yamane Formula
in determining the sample size.

Taro-Yamane Sample Size Determination Formula:

n= N
1+ N (e) 2

28
Where:
Stage 1: n = Sample size
N = Total population
e = Error Margin (.5%)
Stage 2: n= 300
1 + 300 (0.05)²
n= 300
1 +300 × (0.05)²
n= 300
1 + (300 x 0.0025)
n = 300
1+ 0.75
n= 300
1.75 n = 171 staff

A sample size of one hundred and seventy one (171) staff will be selected. The sampling
technique used will be stratified sampling technique; this is because the researcher is interested
in getting equal representation of respondents across the top, middle and lower management
staff. This method involves the sub-division or grouping of the entire population into smaller
categories called strata.
3.5. Instrument for Data Collection

The primary instrument for data collection was a self-administered questionnaire. The
questionnaire will be designed to collect information on the employee’s perceived effect of
material input inflation on organization performance.

3.6. Administration of Research Instrument

A questionnaire was used for this study, questionnaire is a set of question that is designed and
administered to obtain information from the respondents. The questionnaire was divided into two
sections (A & B).

Section A of the questionnaire contains the personal data of the respondent (s). Section B of the
questionnaire would be answered using the Likert 5-point rating scale (Strongly Agree = 5,

29
Agree = 4, Undecided = 3, Disagree = 2, Strongly Disagree = 1). This questionnaire is aimed at
eliciting responses from various respondents.

3.7. Validity of Research Instrument

Validity is the ability of a measuring instrument to measure what is supposed to be measured. To

know the validity of the instrument to be used, the following tests were considered:

Content Validity: this is designed to ensure that the content of a measuring instrument
adequately covers all relevant areas.

The Validity of the questionnaire is based on the content validity to ensure that the information
which is requesting from the respondent covers all relevant areas and the objectives of the
research.

3.8. Reliability of the Instrument

Reliability has to do with the consistency of the instrument. A measurement is regarded as

reliable if it shows the same results time after time. To have valid and reliable data, the
researcher ensured that the questionnaire was well formulated which allows error minimization.
The instrument is of interest to the researcher as a result of its capability of conveying adequate
and thorough information used for the study. The questionnaire also helps to obtain the actual
instruments needed in the research of this work.

The type of Reliability that was adopted is cronbach’s alpha because it’s the most suitable way to
assess the stability and consistency of the results collated over a period of time. The Test-retest
reliability is calculated by administering the same test to the same group of people at two
different points in time, then comparing the results. The more consistent the results are, the
higher the test- retest reliability.

3.9. Method of Data Presentation and Analysis

The data collected in this study was presented in both quantitative and qualitative forms.
Quantitative data will be presented using descriptive statistics such as frequency tables, charts,
and graphs. Qualitative data will be presented using thematic analysis and narrative summaries.
The data was organized according to the research questions and objectives, and presented in a
clear and concise manner to aid in the interpretation of the results.

30
The data collected in this study was analyzed using both descriptive and inferential statistics.
Descriptive statistics will be used to summarize the characteristics of the data such as mean,
median, and mode. The Inferential statistical method selected for this research is regression and
correlation analysis. This is because it can be used to examine the effect and the relationship
between two or more variables, such as the relationship between strategic planning and
organizational performance. It can also be used to predict the effect of one variable on another.
The themes will be presented in narrative summaries to highlight the findings and provide a
deeper understanding of the research topic. All analysis for this research will be performed using
SPSS. The results will be interpreted and discussed in light of the research questions and
objectives, and recommendations will be made for the service delivery industry and future
research.

31
 CHAPTER FOUR

DATA ANALYSIS AND RESULTS

4.0 Preamble

This chapter presents results of data analysis, interpretation of the results and discussion of

findings. Data collected for this study were primary in nature through administering of

questionnaire to the GTbanks in Lagos.

4.1 Descriptive Analysis of Demographic Information of Respondents

This section presents the analyses of the number of copies of questionnaire distributed, returned,
usable and non-usable. Also, under this section, the demographic information of respondents
were analyzed.

4.1.1 Descriptive Analysis of the Administered Research Information

Table 4.1: Research Instruments Administration

Description Respondents Percentage (%)

Copies of questionnaire distributed 171 100

Copies of questionnaire retrieved 162 94.7

Copies of questionnaire not properly filled 14 8.2

Copies of questionnaire used for final analysis 148 86.5

Source: Field Survey, (2023)

Table 4.1 summarizes the response rate of the respondents. It was revealed that, one hundred and
seventy-one (171) copies of questionnaire were administered, one hundred and sixty-two were
retrieved, fourteen (14) copies were discarded because they were not properly filled, while one

32
hundred and forty-eight (148) copies of the questionnaire were found usable for this study. Thus,
respondent’s response rate of 86.5% was achieved.

4.1.2 Descriptive Analysis of Demographic Information of Respondents

This section presents the demographic information of respondents.

Table 4.2: Demographic Table of Respondents

1. Sex
Categories Frequency %
Male 93 62.8
Female 55 37.2
Total 148 100
2. Marital Status
Categories Frequency %
Single 36 24.3
Married 79 53.4
Divorced 18 12.2
Separated 12 8.1
Widowed 3 2.0
Total 148 100
3. Age of respondent
Categories Frequency %
21-30 Years 71 48.0
31-40 Years 38 25.7
41-50 Years 29 20.0
51Years & above 10 6.8
Total 148 100
4. Educational Qualification
Categories Frequency %
OND/NCE 19 12.8
HND/BSC 74 50.0
MMSC/MBA/MPA 53 35.8
Doctoral 2 1.4
Total 148 100
5. Working Experience
Categories Frequency %
1-2 Years 28 18.9
3-5 Years 53 35.8
6-10 Years 30 20.3
11-15 Years 25 16.9
16 years and above 12 8.1
Total 148 100
Source: Field Survey, (2024).
33
The demographic table provides an insightful overview of the characteristics of the respondents,
offering a basis for understanding the sample population's structure in terms of gender, marital
status, age, educational qualification, and working experience. Beginning with sex, the table
indicates that the sample is predominantly male, with 93 males representing 62.8% of the
respondents, while females constitute 37.2% with 55 respondents. This distribution suggests a
gender imbalance within the sample, with more male representation. This disparity may have
implications for the perspectives gathered in the study, particularly if gender influences attitudes
or experiences related to the subject matter under investigation.

Moving on to marital status, the majority of respondents are married, accounting for 53.4% of
the sample with 79 individuals. Single respondents make up 24.3% (36 individuals), while those
who are divorced represent 12.2% (18 individuals). A smaller proportion of the respondents are
either separated (8.1%) or widowed (2.0%). This distribution shows that a significant portion of
the respondents may be in more stable family structures, which could influence their professional
experiences, work-life balance, or perceptions of the work environment. The presence of
divorced, separated, and widowed respondents, though smaller, indicates a diverse range of
marital experiences within the sample.

The age distribution of the respondents highlights that nearly half (48.0%) are between the ages
of 21 and 30, with 71 individuals in this group. This is followed by respondents aged 31 to 40,
who represent 25.7% of the sample, and those aged 41 to 50, making up 20.0%. Only 6.8% of
the respondents are aged 51 years and above. The relatively young age profile, with the majority
of respondents under 40 years, suggests that the sample consists primarily of early to mid-career
professionals. This age distribution could reflect a youthful workforce, which may influence the
respondents' attitudes toward innovation, technology, and career advancement.

In terms of educational qualifications, the largest group of respondents holds a Higher National
Diploma (HND) or Bachelor’s degree (BSC), making up 50.0% of the sample. Respondents with
Master's level qualifications (MMSC, MBA, MPA) constitute 35.8%, while 12.8% hold
OND/NCE certificates. Only 1.4% have attained a doctoral degree. The high percentage of
respondents with higher education credentials indicates a well-educated workforce, which may
contribute positively to their capacity for critical thinking, decision-making, and overall
productivity. The diversity in educational qualifications reflects a range of professional
capabilities and expertise within the sample.

34
Finally, the working experience of the respondents reveals that a majority have been in the
workforce for a significant period. The largest group, representing 35.8%, has 3 to 5 years of
experience, while 20.3% have 6 to 10 years of experience. Those with 1 to 2 years of experience
make up 18.9%, followed by respondents with 11 to 15 years (16.9%) and 16 years or more
(8.1%). This range of experience levels suggests that the sample includes a mixture of relatively
new employees and more seasoned professionals. The diversity in working experience may
influence respondents’ perspectives on organizational growth, job satisfaction, and career
development, offering a comprehensive view of the workforce’s capabilities and challenges.

4.2 Analyses of Respondents’ Responses

Table 4.3: Responses on Artificial Intelligence

S/N Parameters Responses %
Item 1 Banks are effectively utilizing AI Strongly Disagree 4.0
to improve customer experiences Disagree 6.3
Neutral 21.3
Agree 43.1
Strongly Agree 25.7
Total 100
Item 2 AI help banks reduce costs and Strongly Disagree 3.2
increase efficiency. Disagree 8.7
Neutral 20.2
Agree 41.5
Strongly Agree 26.5
Total 100
Item 3 AI in my helps to personalize Strongly Disagree 6.8
banking products and services Disagree 5.9
Neutral 3.8
Agree 38.3
Strongly Agree 45.2
Total 100
Item 4 My bank is transparent about Strongly Disagree 4.0
their usage of AI and its impact Disagree 12.3
on customers. Neutral 21.3
Agree 41.9
Strongly Agree 20.6
Total 100
Item 5 Customers are willing to share Strongly Disagree 21.8
their personal data with my bank Disagree 14.7
for AI-powered services Neutral 18.7
Agree 19.2
Strongly Agree 25.6
Total 100
Source: Field Survey, (2024).
35
Table 4.1 presents a detailed breakdown of respondents' views on the use of artificial intelligence
(AI) in banking, focusing on customer experience, cost reduction, personalization, transparency,
and customer data sharing. The responses are categorized into five levels, ranging from
“Strongly Disagree” to “Strongly Agree,” and offer a nuanced understanding of employees' and
customers' perspectives on the impact of AI in banks.

A significant majority of respondents (68.8%) either "Agree" (43.1%) or "Strongly Agree"

(25.7%) that banks are effectively utilizing AI to improve customer experiences. Only a small
percentage of respondents expressed negative sentiments, with 4.0% "Strongly Disagreeing" and
6.3% "Disagreeing." This suggests that most employees and customers recognize AI's potential
in enhancing customer experience, but there is still a small portion that remains unconvinced.
Furthermore, 21.3% are neutral, indicating that while AI has made an impact, there is room for
greater communication or education on its benefits.

When it comes to cost reduction and increasing efficiency, 68.0% of respondents either "Agree"
(41.5%) or "Strongly Agree" (26.5%) that AI helps in these areas. A smaller percentage (11.9%)
either "Disagree" (8.7%) or "Strongly Disagree" (3.2%). This indicates that the majority see AI
as a valuable tool for improving operational efficiency, although about a fifth of respondents
remain "Neutral" (20.2%). These neutral responses might stem from either lack of awareness or
insufficient clarity about how AI is applied in operational processes.

A strong positive response is observed regarding AI's role in personalizing banking products and
services, with 83.5% either "Agreeing" (38.3%) or "Strongly Agreeing" (45.2%). The low levels
of disagreement (6.8% "Strongly Disagree" and 5.9% "Disagree") show that the majority of
respondents recognize the personalization benefits of AI. The low "Neutral" response (3.8%)
highlights that most people have formed an opinion on the value of AI in customizing services,
possibly due to firsthand experiences with AI-driven personalization in banking.

The responses to whether banks are transparent about AI usage show more variability. While
62.5% of respondents either "Agree" (41.9%) or "Strongly Agree" (20.6%), a significant portion
remains undecided, with 21.3% "Neutral." Additionally, 16.3% of respondents either "Disagree"
(12.3%) or "Strongly Disagree" (4.0%), indicating that some customers or employees are either
skeptical or unaware of how banks communicate their AI strategies and their impacts on
customers. This points to a potential gap in communication about AI usage, suggesting that
banks may need to improve transparency in this area.
36
The responses regarding customer willingness to share personal data for AI-powered services
show a mixed view. While 44.8% of respondents either "Agree" (19.2%) or "Strongly Agree"
(25.6%), a considerable 36.5% either "Disagree" (14.7%) or "Strongly Disagree" (21.8%). This
division suggests a noticeable level of caution or reluctance among customers to share personal
data, possibly due to privacy concerns. With 18.7% remaining neutral, it is clear that banks need
to foster greater trust and assure customers about the security and ethical use of their data in AI
systems.

Table 4.4: Responses on Customer Satisfaction

S/N Parameters Responses %

Item 1 My banks make use of Chatbots Strongly Disagree 2.0
and virtual assistants provide Disagree 8.3
helpful and informative Neutral 25.7
assistance. Agree 46.5
Strongly Agree 17.8
Total 100
Item 2 AI-powered customer service is Strongly Disagree 7.5
available 24/7 in my bank. Disagree 2.0
Neutral 18.2
Agree 52.2
Strongly Agree 20.2
Total 100
Item 3 AI helps me make better Strongly Disagree 2.4
financial decisions. Disagree 6.7
Neutral 8.6
Agree 32.5
Strongly Agree 49.5
Total 100
Item 4 I am more likely to recommend Strongly Disagree 0.4
the bank to others due to its use Disagree 7.9
of AI Neutral 21.3
Agree 52.6
Strongly Agree 17.8
Total 100
Item 5 I believe AI is the future of Strongly Disagree 5.9
banking. Disagree 0.4
Neutral 22.1
Agree 54.2
Strongly Agree 17.4
Total 100
Source: Field Survey, (2024).

37
The table 4.4 provides an overview of respondents' perceptions of AI's role in enhancing
customer satisfaction in banks, focusing on its effectiveness in various areas such as customer
service, financial decision-making, and overall satisfaction.
The first item reveals that a large portion of respondents (64.3%) either "Agree" (46.5%) or
"Strongly Agree" (17.8%) that chatbots and virtual assistants provide helpful and informative
assistance. A smaller percentage (8.3%) "Disagree" and only 2.0% "Strongly Disagree," while
25.7% remain neutral.
In terms of AI-powered customer service availability, 72.4% of respondents either "Agree"
(52.2%) or "Strongly Agree" (20.2%) that their bank offers 24/7 service. Only a small percentage
(9.5%) expressed dissatisfaction, while 18.2% were neutral. This high level of agreement
highlights the significance of AI in ensuring round-the-clock assistance, a crucial factor in
customer satisfaction.
A strong majority of respondents (82%) either "Agree" (32.5%) or "Strongly Agree" (49.5%)
that AI helps them make better financial decisions. Very few respondents disagreed (6.7%) or
strongly disagreed (2.4%), while 8.6% were neutral. This high level of agreement underscores
the trust customers place in AI's ability to analyze data and offer personalized financial advice.
The responses regarding AI’s influence on customer recommendations reveal that 70.4% of
respondents are likely to recommend their bank to others because of its use of AI. Only 7.9%
"Disagree" and 0.4% "Strongly Disagree," while 21.3% are neutral. This suggests that AI plays a
significant role in customer satisfaction and loyalty, with most customers recognizing AI as a
value-adding factor in their banking experience.
The final item indicates that 71.6% of respondents believe AI is the future of banking, with
54.2% "Agreeing" and 17.4% "Strongly Agreeing." Only a small percentage (5.9%) "Strongly
Disagree" and 0.4% "Disagree," while 22.1% are neutral. This high level of agreement reflects a
growing acceptance and anticipation of AI's role in the future of banking. However, the relatively
high neutral response suggests that while many customers are optimistic about AI, there is still a
portion that may need more information or education on how AI will shape the future of
banking.

38
Table 4.5: Responses on Customers Productivity

S/N Parameters Responses %

Item 1 AI has the potential to Strongly Disagree 21.4
significantly improve Disagree 20.8
operational efficiency in banks Neutral 2.9
Agree 27.8
Strongly Agree 27.1
Total 100
Item 2 AI can optimize processes and Strongly Disagree 1.6
workflows to enhance Disagree 7.5
productivity. Neutral 15.4
Agree 49.0
Strongly Agree 26.5
Total 100
Item 3 AI can optimize resource Strongly Disagree 21.4
allocation and reduce time Disagree 20.7
waste. Neutral 5.7
Agree 31.8
Strongly Agree 20.4
Total 100
Item 4 AI can help banks negotiate Strongly Disagree 2.0
better deals with suppliers and Disagree 4.0
vendors Neutral 20.9
Agree 55.7
Strongly Agree 17.4
Total 100
Item 5 AI can improve the accuracy Strongly Disagree 21.6
and efficiency of financial Disagree 16.2
reporting. Neutral 10.5
Agree 29.8
Strongly Agree 21.9
Total 100
Source: Field Survey, (2024).
Table 4.6 presents the respondents' perspectives on the role of Artificial Intelligence (AI) in
enhancing productivity within banks.
Item 1 highlights that 54.9% of respondents either "Agree" (27.8%) or "Strongly Agree" (27.1%)
that AI has the potential to significantly improve operational efficiency in banks. However, a
substantial portion (42.2%) "Disagree" (20.8%) or "Strongly Disagree" (21.4%) with this
statement, while 2.9% are neutral. This suggests a divided opinion where just over half the

39
respondents believe in AI’s efficiency-enhancing potential, while a significant minority remains
skeptical. This division could stem from varying levels of exposure to AI technology or
differences in its application across different banking functions.

In Item 2, the majority of respondents (75.5%) "Agree" (49.0%) or "Strongly Agree" (26.5%)
that AI can optimize processes and workflows to enhance productivity. Only 9.1% of
respondents "Disagree" (7.5%) or "Strongly Disagree" (1.6%), and 15.4% are neutral. This
overwhelming agreement indicates strong confidence in AI's ability to streamline operations and
improve efficiency across banking processes. The high levels of agreement suggest that process
optimization through AI is widely recognized as a key driver of productivity improvements.

Item 3 presents a more mixed response regarding AI’s ability to optimize resource allocation and
reduce time wastage. While 52.2% of respondents "Agree" (31.8%) or "Strongly Agree" (20.4%)
with this statement, a significant 42.1% "Disagree" (20.7%) or "Strongly Disagree" (21.4%), and
5.7% are neutral. This suggests that while a majority see the potential for AI in optimizing
resources, there is still considerable doubt among many respondents. This could reflect
challenges in the practical implementation of AI in resource management, as well as the
perceived complexity of aligning AI tools with human resources and other operational assets.

In Item 4, a significant majority (73.1%) of respondents "Agree" (55.7%) or "Strongly Agree"

(17.4%) that AI can help banks negotiate better deals with suppliers and vendors. Only 6.0% of
respondents "Disagree" (4.0%) or "Strongly Disagree" (2.0%), and 20.9% are neutral. This
suggests that most respondents see AI as an effective tool in managing external negotiations and
improving supplier relations. The high agreement rate reflects the belief that AI can leverage
data and predictive analytics to create more favorable outcomes in deal-making, benefiting
overall productivity.

Lastly, Item 5 shows a divided perspective on AI’s role in improving the accuracy and efficiency
of financial reporting. While 51.7% "Agree" (29.8%) or "Strongly Agree" (21.9%), a notable
portion (37.8%) "Disagree" (16.2%) or "Strongly Disagree" (21.6%), and 10.5% remain neutral.
This mixed result could be due to differing experiences with AI's application in financial
reporting processes. For some, AI may already be a valuable tool in automating reporting tasks

40
and improving accuracy, while others may face challenges or limitations in its current use,
resulting in skepticism.

4.3 Test of Hypotheses

This section is concerned with the test of the stated research hypotheses for this study.
4.3.1 Hypothesis One
H01: There is no significant a significant effect of AI on customer satisfaction in Gtbank

Table 4.6a: Model Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate

1 .768a .581 .863 45.533

a. Predictors: (Constant), AI

Table 4.6b: ANOVAa

Sum of
Model Squares Df Mean Square F Sig.

1 Regression 3.293 1 3.293 15.175 .000b

Residual 39.624 146 .217

Total 42.917 147

a. Dependent Variable: Customer Satisfaction

b. Predictors: (Constant), AI
Table 4.6c: Coefficient of Result

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta T Sig.

1 (Constant) 3.152 .321 13.542 .000

AI .538 .112 .768 2.433 .000

41
a. Dependent Variable: Customer Satisfaction

Source: SPSS computation, (2024).

Note: ***, ** & * indicate statistical significance 5%.

The model summary (Table 4.6a) shows that the R value is 0.768, indicating a strong positive

correlation between AI and customer satisfaction in GTBank. The R-Square value of 0.581

suggests that 58.1% of the variation in customer satisfaction is explained by AI. This shows a

significant influence of AI on customer satisfaction. The standard error of 45.533 is relatively

small, pointing to the reliability of the model.

The ANOVA table (Table 4.6b) further supports the significance of the model, with a p-value of

0.000, indicating that AI significantly impacts customer satisfaction. The coefficient table (Table

4.6c) shows that AI has a positive and significant effect on customer satisfaction, with a

standardized beta value of 0.768. The p-value (0.000) is below the 0.05 threshold, confirming the

significant relationship between AI and customer satisfaction in GTBank.

4.3.2 Hypothesis Two

H02: AI has no significant effect on customer productivity in Gtbank
Table 4.7a: Model Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate

1 .493a .218 .201 26.153

a. Predictors: (Constant), AI

Table 4.7b: ANOVAa

Sum of
Model Squares Df Mean Square F Sig.

42
1 Regression 3.118 1 3.118 13.735 .000b

Residual 33.187 146 .227

Total 36.305 147

A. Dependent Variable: Customers Productivity

b. Predictors: (Constant), AI

Table 4.7c: Regression Estimation Result

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta T Sig.

1 (Constant) 2.769 .108 6.456 .000

AI .612 .128 .493 1.127 .000

a. Dependent Variable: Customers Productivity

Source: SPSS computation, (2024).

The model summary (Table 4.7a) shows an R value of 0.493, indicating a moderate positive
relationship between AI and customer productivity in GTBank. The R-Square value of 0.218
means that 21.8% of the variation in customer productivity is explained by AI, suggesting a
significant but moderate effect. The standard error of 26.153 indicates the level of variation in
the data. The ANOVA table (Table 4.7b) shows a significant F-value of 13.735 with a p-value of
0.000, confirming that AI has a statistically significant effect on customer productivity. The
coefficient table (Table 4.7c) indicates that AI has a positive impact on customer productivity,
with a standardized beta value of 0.493 and a p-value of 0.000, showing that AI significantly
influences customer productivity in GTBank.

4.4 Discussion of Findings

The findings of this research work are based on data collected from the respondents which is
used to test the hypotheses adopted by this study.

43
Hypothesis one revealed there is a significant effect of Artificial Intelligence (AI) on customer
satisfaction in Gtbank. The study is in line with the findings Gupta et al. (2022) who
demonstrating that AI-driven systems lead to faster service delivery, accurate responses, and
enhanced user experience, resulting in higher satisfaction among customers. Kim & Park (2021)
further supported this by showing that banks utilizing AI-powered chatbots witnessed a
significant improvement in customer satisfaction ratings due to reduced waiting times and
efficient handling of routine inquiries.

Moreover, AI’s ability to analyze vast amounts of data in real time enables banks to anticipate
customer needs and offer tailored products, which further strengthens the customer-banking
relationship. Rana et al. (2023) in their research concluded that the integration of AI into
customer service processes allowed banks to proactively engage with customers, thereby
boosting satisfaction and loyalty. The findings highlight that customers prefer personalized
services that cater to their specific needs, which AI can offer more effectively than traditional
banking methods.

Hypothesis three revealed that there is a significant effect of AI on customer’s productivity of the
Gtbank banks. The study corroborate with the findings of Brynjolfsson and McAfee (2021) who
emphasizes that AI enhances productivity by enabling banks to process large volumes of data
quickly and accurately. By automating back-office operations such as compliance checks, fraud
detection, and loan approvals, banks can significantly reduce turnaround times, leading to
improved service delivery and customer satisfaction. Furthermore, AI facilitates personalized
financial services, which not only enhances customer experience but also increases customer
loyalty, thus driving overall productivity.

In the context of productivity measurement, a study by Dehning et al. (2020) found that banks
utilizing AI technologies reported a notable increase in key performance indicators (KPIs),
including transaction speed, customer retention rates, and revenue growth. The research
concluded that AI-driven insights enable banks to adapt quickly to market changes, optimize
resource allocation, and innovate service offerings, further enhancing productivity.

44
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Preamble

This chapter focuses on a summary, conclusion, and recommendation made from the study.

5.1 Summary

i. There is a significant effects of AI on customer satisfaction in GTbank

ii. AI has significant effect on customers productivity in GTbank

5.2 Conclusion

The findings of the study reveal a significant impact of AI on customer satisfaction in GTBank.
The statistical analysis, as shown in the model summary and ANOVA results, confirms that AI
plays a crucial role in enhancing customer satisfaction. With a strong positive correlation (R =
0.768) and an R-Square of 0.581, it is evident that AI contributes to 58.1% of the variations in
customer satisfaction. This indicates that AI-driven systems and technologies employed by
GTBank are effectively improving the overall experience for their customers, offering greater
convenience, responsiveness, and service quality.

Moreover, the regression coefficients highlight that AI has a positive and statistically significant
effect on customer satisfaction, as shown by the standardized beta value of 0.768 and a p-value
of 0.000. This suggests that the more GTBank invests in AI innovations, the more satisfied their
customers are likely to be. This could be attributed to AI’s ability to enhance service delivery,
personalize customer experiences, and provide faster resolutions to queries and concerns, leading
to higher satisfaction levels.

45
In addition to customer satisfaction, the study also found that AI significantly affects customer
productivity in GTBank. The model summary and ANOVA tables demonstrate a moderate but
important positive relationship, with an R value of 0.493 and an R-Square of 0.218, showing that
AI accounts for 21.8% of the variation in customer productivity. The p-value of 0.000 confirms
that this effect is statistically significant, highlighting the role AI plays in improving customer
productivity by offering efficient, self-service options and faster transactions.

In conclusion, both hypotheses reveal that AI significantly influences both customer satisfaction
and productivity in GTBank. The bank’s use of AI technologies not only enhances customer
experiences but also makes banking more efficient, empowering customers to manage their time
and tasks more productively. As AI continues to evolve, GTBank can further leverage its
capabilities to maintain a competitive edge in customer service and operational efficiency,
ultimately driving long-term business success.

5.3 Recommendations

Based on the conclusion of this study, the following recommendation were:

i. GTBank should integrate AI across all customer interaction points, including mobile
apps, online banking platforms, and physical branches. An omnichannel approach
ensures that customers receive seamless service, regardless of how they choose to
interact with the bank. AI-driven systems can streamline the customer journey, from
resolving inquiries on digital platforms to enhancing in-branch service with AI-
assisted tools. By ensuring that AI supports customers across multiple channels,
GTBank can further elevate customer satisfaction by offering faster, more consistent,
and convenient services that meet customer needs at every touchpoint.
ii. GTBank should continue to enhance AI automation in its transactional processes to
improve customer productivity. By automating routine tasks such as account
management, loan applications, or fund transfers, customers can complete
transactions more quickly and with fewer errors. AI can also automate complex
financial processes like investment management and financial planning, allowing
customers to manage their accounts efficiently without needing to visit a branch or
speak to a representative. This not only saves time for customers but also empowers
them to take control of their banking activities in a more productive manner.

46
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 QUESTIONNAIRE

LAGOS STATE UNIVERSITY

Faculty of Management Sciences

Department of Business Administration

Dear Respondent,

I am a student of the above institution and wish to carry out a research work on “Effect of
Artificial Intelligence on Organizational Performance in Gtbank.” Your assistant in
completing this questionnaire is solicited. I promise to ensure strict confidentiality on
information that will be provided.

Thanks in anticipation of your corporation.

………………………

Researcher

APPENDIX 2: QUESTIONNAIRE
Section 1: Demographic Data
Please provide your answer to each of the following questions. Read carefully and choose the
appropriate answer by ticking the box against it.

Sex: Male ( ) Female ( )

Age: 21-30yrs ( ) 31-40yrs ( ), 41-50yrs ( ), 51-60 ( ), 61 and above ( )

51
Education: Diploma/OND ( ) HND/BSc ( ) MSC/MBA/MPA ( ) Doctoral Degree ( )

Work Experience: 1-2yrs ( ), 3-5yrs ( ), 6-10yrs ( ), 11-15yrs ( ), 16 and above ( )

52
In the following sections, the following notations apply:
SA = Strongly Agree, A = Agree, U = Undecided, D = Disagree, SD=Strongly
Disagree
Section 2:
1. Artificial Intelligence
S/N STATEMENT SA A U D SD
1. Banks are effectively utilizing AI to improve customer
experiences

2. AI help banks reduce costs and increase efficiency.

3. AI in my helps to personalize banking products and services

4. My bank is transparent about their usage of AI and its impact

on customers.

5. Customers are willing to share their personal data with my

bank for AI-powered services

2. Customer Satisfaction
S/N STATEMENT SA A U D SD
1. My banks make use of Chatbots and virtual assistants provide
helpful and informative assistance

2. AI-powered customer service is available 24/7 in my bank.

3. AI helps me make better financial decisions.

4. I am more likely to recommend the bank to others due to its

use of AI

5. I believe AI is the future of banking.

3. Customers Productivity
S/N STATEMENT SA A U D SD
1. AI has the potential to significantly improve operational
efficiency in banks

2. AI can optimize processes and workflows to enhance

productivity.

3. AI can optimize resource allocation and reduce time waste.

4. AI can help banks negotiate better deals with suppliers and

53
 vendors

5. AI can improve the accuracy and efficiency of financial

reporting.

54