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Artificial Intelligence and Bank Soundness: A Done Deal? - Part 1

In: Operations Management - Emerging Trend in the Digital Era

Author

Listed:
  • Sina Joneidy
  • Charmele Ayadurai

Abstract

Banks soundness plays a crucial role in determining economic prosperity. As such, banks are under intense scrutiny to make wise decisions that enhances bank stability. Artificial Intelligence (AI) plays a significant role in changing the way banks operate and service their customers. Banks are becoming more modern and relevant in people's life as a result. The most significant contribution of AI is it provides a lifeline for bank's survival. The chapter provides a taxonomy of bank soundness in the face of AI through the lens of CAMELS where C (Capital), A(Asset), M(Management), E(Earnings), L(Liquidity), S(Sensitivity). The taxonomy partitions opportunities from the main strand of CAMELS into distinct categories of 1 (C), 6(A), 17(M), 16 (E), 3(L), 6(S). It is highly evident that banks will soon extinct if they do not embed AI into their operations. As such, AI is a done deal for banks. Yet will AI contribute to bank soundness remains to be seen.

Suggested Citation

  • Sina Joneidy & Charmele Ayadurai, 2021. "Artificial Intelligence and Bank Soundness: A Done Deal? - Part 1," Chapters, in: Antonella Petrillo & Fabio De Felice & Germano Lambert-Torres & Erik Leandro Bonaldi (ed.), Operations Management - Emerging Trend in the Digital Era, IntechOpen.
    • Handle: RePEc:ito:pchaps:214749
    DOI: 10.5772/intechopen.95539
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    More about this item

    Keywords

    bank; bank soundness; financial sector; Artificial Intelligence (AI); CAMELS;
    All these keywords.

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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