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Customer acceptability towards AI-enabled digital banking: a PLS-SEM approach

Author

Listed:
  • Swaraj S. Bharti

    (National Institute of Technology Jamshedpur)

  • Kanika Prasad

    (National Institute of Technology Jamshedpur)

  • Shwati Sudha

    (National Institute of Technology Jamshedpur)

  • Vineeta Kumari

    (Magadh University)

Abstract

Artificial Intelligence (AI) has proved its significance in every field and is yet to be explored in the banking sector in India. The study aims to understand the customers' perception of using AI-based technologies in banks. Satisfaction is the first step towards acceptability and retention of customers towards lesser-known technology and automated process implemented in banks. The constructs of the study are referred from the technology acceptance model to define their level of acceptance and are divided into independent and dependent variables. The independent variables are “transparency”, “awareness level”, “security”, “efficiency”, “trust”, and “social influence”, and the dependent variable is “customer satisfaction”. Therefore, the structural equation model was developed from the customers’ (N = 500) response to retail banks in northern India. The study reveals that trust is the most significant factor for greater customers' satisfaction towards AI-enabled technologies in banks, followed by the customers’ awareness level. The security of AI-based banks is the least important contributor to customer satisfaction. Additionally, the control variables, i.e., age and gender, govern the customers' perception. Understanding customer acceptability towards AI-based technology in retail banks is rare in emerging nations such as India. The findings provide insight into the formulation of compliance. It also highlights the regulation applicable to digital banks by the competent authority in India. The paper concludes by stating practical implications for banking authorities and decision-makers to incorporate AI into their system for customer service.

Suggested Citation

  • Swaraj S. Bharti & Kanika Prasad & Shwati Sudha & Vineeta Kumari, 2023. "Customer acceptability towards AI-enabled digital banking: a PLS-SEM approach," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(4), pages 779-793, December.
    • Handle: RePEc:pal:jofsma:v:28:y:2023:i:4:d:10.1057_s41264-023-00241-9
    DOI: 10.1057/s41264-023-00241-9
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    2. Okey Peter Onyia & Jasman Tuyon, 2023. "Disruptions, innovations and transformations in the global financial services market: the impacts of emerging cybersecurity, geopolitical and sustainability risks," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(4), pages 627-630, December.

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