Project Report

A STUDY ON ROLE AND IMPACT OF ARTIFICIAL INTELLIGENCE

ON BANKING SERVICES

Submitted in partial fulfilment of the requirements for the award of the degree
of

MASTER OF BUSINESS ADMINISTRATION

BANGALORE UNIVERSITY

Submitted by

PARAMESHA A

Reg No. 17ATCMD029

Under the guidance of

Dr. G. PRAHLAD CHOWDRI M.com, Ph.D.

(ASSOCIATE PROFESSOR OF COMMERCE AND MANAGEMENT)

GOVERNMENT RAMNARAYAN CHELLARAM COLLEGE OF

COMMERCE AND MANAGEMENT

RACE COURSE ROAD, BENGALURU – 560 001

2018-19
 CONTENTS

Sl. No Particulars Page No

1 Introduction
2 Research Design and Methodology
3 Profile of Sample Respondents
4 Data Analysis and Interpretation
5 Findings, Suggestions and Conclusion
6 Bibliography
 CHAPTER 1

INTRODUCTION
INTRODUCTION

The changes after economic liberalization and globalization process, have significant impact
on the banking institution.

Banking technology is an attempt to share the silent observations on the current status and
emerging trend in banking technology. Banks have been working towards a digital India,
adopting the latest technologies and introducing a number of products and application to
improve customer convenience. With the number of mobiles in the country crossing one billion
of which more smartphones, banks are vying with each other to give the best digital solution
to the customers for payments and other banking services from anywhere, anytime. After the
demonetisation drive, the government has been pushing for a less-cash society and bank have
been lending support by boosting the efforts on digital banking – through POS(point of sale)
machines, mobile wallets, mobile banking, Aadhaar-enable payment systems, etc. artificial
intelligence will changes the business world in tree aspects: automation, intelligence, and
creation. It will increase technology, support intelligent analysis and decision-making, and
create new business models and industries.

In the banking sector, it will make some jobs redundant, while at the same time increasing
efficiency and creating jobs. Based on analysis of the tree major value chains in the financial
services sector – banking insurance and capital markets, this report will examine the potential
impact of artificial intelligence technology on each industry, jobs and activities, and further
estimate the impact on overall employment in the banking industry. Banking is projected to
benefit the most out of incorporating artificial intelligence systems in the next couple of years.
Analysts estimate that artificial intelligence will save the banking industry more than $1 trillion
by 2030.Financial institutions should expect a 22% cost reduction in operating expenses due to
artificial intelligence.

Technology has become one of the most important element of our lives and has an impact on many
things we do. One of those area is banking. Artificial Intelligence in banking is more than about new
technology. The technology itself is getting better and smarter day by day, allowing more and newer
banks to adopt the AI for various applications. Banking sector is becoming one of the first adopters
of artificial intelligence. And banks are exploring and implementing the technology in various ways.
BANKING

A person or company carrying on the business of receiving moneys, and collecting demand
drafts, for customers subject to the obligation of honouring cheques drawn upon them from
time to time by the customers.

BANKING SERVICES

Any activities involved in accepting and safeguarding money owned by other individuals and
entities, and then lending out this money in order to earn a profit.

BANKER

An individual that is employed by a banking institution and participates in various banking

services and financial transactions, which may or may not include their investments.

A banker ... is a dealer who buys money, or money and debts, by creating other debts, which
he does with his credit - exchanging for a debt payable in the future one payable on demand.

ARTIFICIAL INTELLIGENCE

Meaning

The theory and development of computer systems able to perform tasks normally requiring human
intelligence, such as visual perception, speech recognition, decision-making, and translation between
languages. “Artificial intelligence is an area of computer science that emphasizes the creation of
intelligent machines that work and react like humans.”

Definition

Artificial intelligence is a type of computer technology which is concerned with

making machines work in an effective and intelligent way, similar to the way that the
human mind works.

- English dictionary
MACHINE LEARNING

Machine learning is an application of artificial intelligence that provides systems the ability to
automatically learn and improve from experience without being expressly
programmed. Machine learning focuses on the development of technological computer
programs that can access data and use it learn for themselves.

“Machine learning is an artificial intelligence discipline geared toward the technological

advanced development of human knowledge. Machine learning allows computers to handle
new situations via analysis, self-training, observation and experience”.

CHAT BOTS

A chatbot is an artificial intelligence program that simulates interactive human conversation by

using key pre-calculated user phrases and auditory or text-based signals. Chatbots are
frequently used for basic customer service and marketing systems that frequent social
networking hubs and instant messaging clients.

MOBILE BANKING

Mobile banking refers to the use of a mobiles or smartphone or other cellular device to
perform online banking tasks while away from your home computer, such as
monitoring account balances, balance status, transferring funds between accounts, bill
payment and locating an ATM.
8 NEW BANKING TECHNOLOGIES /APPLICATIONS

1. Blockchain Technology
Blockchain technology is set to fundamentally transform banking services and financial
services. It decentralizes banking operations from a central authority to a widespread network
of computers. Financial transactions are broken down into encrypted packets, which are then
added to the “chain” of computer code and encrypted for enhanced cybersecurity. Because the
new technology has the potential to improve numerous facets of banking services and is the
basis for other banking technology trends like bitcoin, it’s no longer a question of blockchain
will change the banking service industry, but when, according to the Wharton School of the
University of Pennsylvania.

2. Upgraded ATMs

ATMs(Automated Teller Machine) transformed the bank technology system when they were
first introduced in 1967. The next revolution in ATMs is likely to engaged in contactless
payments. Much like Apple Pay, Google Wallet, soon you’ll be able to conduct contactless
ATM transactions using through smartphone.

Some ATM innovations are already available overseas. Biometric authentication is already
used in India. These technologies can help overall bank security by protecting against ATM
frauds and hacks. Elimination of unnecessary charges from ATMs.

3. Proliferation of Non-Banks

Banks are hoping that technology will allow them to deliver a faster, more transparent
experience and better services to consumers. A large portion of their resources, is necessarily
dedicated to security, compliance and other industry-specific requirements, which has allowed
non-banks providers that are not regulated by the banking service sector.

4. Apple Store-Style Experience

Bank experience of the future might be more like shopping at an big store and Apple store.
Because so many people now can download friendly banking apps or easily find an ATM to
handle basic banking transactions, the typical in-bank customer today is seeking help involving
a personal interaction.
Banks hoping to increase sales and services in the future for customers and considering this
transformation as a way for customers to engage more directly with the bank and its products,
just like in an Apple store.

5. Automated Financial Services Employees

Financial crisis, said up to 30 percent of banking jobs could disappear within the next five years
due to over developments in advanced technology, like robotics in banking services.

Many employees of Wall Street, largest firms and banking sectors are already having to adapt
or look for other positions due to the use of technologies such as machine learning, chat bots
and cloud computing, which automate their operations.

6. Mobile and Digital Banking

The mobile and digital transformation in the banking system has only just began and growth
is already explosive. Banks are investing more in digital banking technology, in which
customers use mobile, website or digital platforms to use banking services. Artificial
intelligence in banking solutions, such as chatbots, machine learning, often assist customers in
simple tasks such as making payments. In a Forbes survey on banking customer, 86 percent of
banks indicated that these types of banking services represent their top technology investments.

7. Partnerships

Although banks can invest lots of money into technology, the fastest way to deliver financial
innovation in the future is likely going to involve strategic partnerships.

Fast-growing companies that already have new-wave financial technology or social media
platforms in place could make excellent partners for traditional banks seeking to enhance
customer experience.

8. Wearables

Wearables such as smartwatches are poised to become the future of the retail banking
experience, according to Samsung Insights. One example is that banks could use Bluetooth
beacons to give personal greetings to customers smartwatches when they enter a banking
location.
Overall, consumer behaviour and smart device trends are steering banking technology
advances in the direction of convenience. An increasing number of remote technologies will
allow you to interact with your bank right from the your hand, And from your email inbox to
visiting an actual branch, you can expect to encounter a whole new customer feeling, perhaps
even sooner than you think. Another variety of wearable might be smart glasses for bank tellers,
which could process customer banking information for the employee as the employee is
simultaneously doing other customer service tasks in bank.

9. Digitization

Artificial Intelligence applications include digitization for simplified banking services and
enhanced productivity. This created a comprehensive platform for customers and providers to
connect well as digitization of documentation has already reduced the pain which was not the
case before. Digitization refers to enabling, improving baking operations by leveraging digital
technology and context of digitized data.

10. Data based Artificial Intelligence applications

A large amount of data can be analysed effectively with the help of applications installed in
personal robots, end-user devices and the financial institution which also helps with
projections, predictions and implementing customized financial advice. The financial plans and
strategies can be acquired by these applications through study and research, about loans, rates,
tracking the progress and also with customized investment opportunities.

11. Personalization

Personalization of banking services will be helping customers in making better financial

decisions through technological and automated financial planners and advisors. They offer
suggestions about stocks and bonds after analysing the market structure against the user’s
financial purposes.

12. Digital Wallets

Digital wallets are becoming the future of payment technologies with apps like Apple,
PhonePe, Google Tez, Paytm and others which are leaping on their gateways. This decreases
the dependency on the physical cash with boosting the reach of money to the higher levels. The
rise of the digital wallets that increases the technology usage.
13. Voice Assistance

Voice Assistance is leading to gradually fade off the physical presence, as artificial intelligence
is enabling the customers to use banking services with touch screens and voice commands.
Interactive Voice Response System (IVRS) helps in processing requests in order to the answer
the questions, connecting users with various banking services and provides the required
information. This decrease the errors which used occur because of the human.

14. Customer support

In an attempt to enhance the customer experience and set themselves apart, most of the banks
are building customer-centric cultures with the advancement of machine learning, Natural
Language Processing, and cognitive computing. All these are important for banks to make
customers happy, better quality of services and avoiding waiting lines in the bank in the coming
future.

TYPES OF BANKING SERVICES

In the modern world, banks offer a various types of services to attract customers.

1. Foreign Currency Exchange

Banks deal with foreign currencies. As the requirement of customers, banks exchange foreign
currencies with local currencies, which is essential to settle down the dues in the international
business. Nowadays exchange of foreign currency available in online.

2. Consultancy

Modern commercial banks are large organizations. Banks can expand their function to a
consultancy business. In this function, banks hire financial, legal and market experts who
provide advice to customers regarding investment, industry, trade, income, tax etc.

3. Bank Guarantee

Customers are provided the facility of bank guarantee by modern commercial and public banks.
When customers have to deposit certain fund in government offices or courts for a specific
purpose, a bank can present itself as the guarantee for the customer, instead of depositing fund
by customers.
4. Remittance of Funds

Banks help their customers in transferring funds from one place to another place through
cheques, drafts, etc. and also banks provide clearing of cheques through ATMs electronically,
demand drafts are clear through online.

5. Credit cards

A credit card is cards that allow their holders to make purchases of necessary goods and
services in exchange for the credit card’s provider immediately paying for the goods or service,
and the cardholder promising to pay back what amount of the purchase to the card provider
over a period of time, and with interest.

6. ATMs Services

ATMs replace human bank tellers in performing giving banking functions and services such as
deposits, withdrawals, account inquiries balance enquiry. Key advantages of ATMs include:

24-hour availability

Elimination of labour cost

Convenience of location, save the more time.

7. Debit cards

Debit card is card that used to electronically withdraw funds directly from the cardholders’
accounts. Most debit cards require a Personal Identification Number (PIN) to be used to verify
the transaction, in future biometric is required for cash withdraw from your debit cards.

8. Home banking

Home banking is the process of completing the banking and financial transaction from one’s
own home as opposed to utilizing a branch of a bank.

It includes actions such as making account enquiries, transferring money, booking movie
tickets, paying bills, applying for loans, directing deposits.
9. Online banking

Online banking is a service offered by banks to customer that allows account holders to access
their account data via the internet. Online banking is also called as “Internet banking” or “Web
banking.” Online banking through private and public sector banks enable customers to perform
all routine transactions, such as account to account transfers, balance enquiries, bill payments,
and stop-payment requests, and some even offer online loan and credit card applications.

Account information can be accessed anytime, day or night, and can be done from any place
or anywhere.

10. Mobile Banking

Mobile banking (also called as M-Banking) is a term used for performing balance checks,
account transactions, e-payments, credit and debit applications and other banking transactions
and services through a mobile device such as a mobile phone or Personal Digital Assistant
(PDA).

11. Accepting Deposit

Accepting deposit means money is accepted as deposit from savers or account holders is the
primary function of a bank. Banker accept deposit from those who can save money but cannot
utilize in profitable sectors.

People prefer to deposit their savings in a bank because by doing so, they earn interest and
safeguarding their money.

12. Priority banking

Priority banking can include a number of various services such as payment of bills online, free
checking, financial consultation, and information. Nowadays priority banking is offered to new
customers of a banking institution as a promotion.

13. Private banking

Personalized banking services and financial services that are offered to a bank’s digital, high
net worth individuals (HNWIs), For wealth management purposes.

Private Banks main aim is maintain privacy to match such individuals with the most
appropriate options.
14. Advancing of Loans

Banks are profit-oriented business organizations by providing advance loans to customers.

banks have to advance a loan to the public and generate interest from them as profit. After
keeping certain cash reserves, banks can provide short-term, medium-term and long-term loans
to needy borrowers.

15. Overdraft

Bank provides overdraft facilities to its customers through which they are allowed to withdraw
more than their deposits and they get interest is charged from the customers on the overdrawn
amount.

16. Discounting of Bills of Exchange

This is another popular type of lending by bank services. Through this service, a holder of a
bill of exchange can get it discounted by the bank, in a bill of exchange, the debtor accepts the
bill drawn upon him by the creditor and agrees to pay the amount mentioned on maturity. After
making some marginal deductions the bank pays the value of the bill to the customer or holder.

17. Check/Cheque Payment

Banks provide cheque pads to the account holders. Account holders can deposit the cheque
through ATM and it is the new services come in banking sector for better services to customer.

Banks pay for cheques of customers after formal verification by official of the banks.

18. Collection and Payment Of Credit Instruments

In modern business, various types of credit instruments such as the bill of exchange, promissory
notes, cheques, bank drafts etc. are used in banks deal with such instruments. Modern banks
collect and pay different types of credit instruments, this is the service by modern banks.
ADVANTAGES AND DISADVANTAGES OF AI IN BANKING

ADVANTAGES

1. Better Customer Support

Several pieces of evidence advocate that the customers voluntarily prefer self-service options
which allow them to chat with a virtual assistant as if it were a live customer representative.
Most leading banks have already added virtual assistants to their instant website chatbots,
machine learning, voice response systems, and mobile applications. Artificial Intelligence
considers every interaction as a teachable moment, so the chatbots (virtual assistants) keeps
getting better while understanding customers. With artificial intelligence, virtual assistants can
deliver better and good customer support. It also allow sentiment analysis, so the virtual
assistant can determine when individuals are getting irritate and instantly transfer them to a live
agent.

2. Enhanced Banking Services

Artificial intelligence improves the banking process while giving customer service a new level
of comfortability. It allows banks to meet customers’ expectations with comprehensive
technical and digital support. With Artificial Intelligence, you can achieve better and greater
precision and accuracy. From cash transfer to bills payment, book tickets online, cards
management, and other support, AI can significantly enrich the satisfaction level of your
customers. All of these operations can be easily managed through desktops, smartphones, and
electrical devices and other mobile devices.

3. Scam Recognition

With an immense growth of banking fraud, scam recognition and reduction has become
challenging for the banking sector and its possible with artificial intelligence. Many banks tried
to identify the factors and powerful solutions but couldn’t succeed. However, AI makes it easier
to detect the factors involved in frauds and support investigators. It improves financial security
with advanced fraud prevention strategy. Artificial Intelligence works as a real-time scam
solution for the banking sector while handling composite situations and strategy. Based on
advanced data analysis, AI can detect fraud by flagging unusual transactions. It also feeds back
into the consumer’s profile which subsequently builds a secure environment in banking.
4. Reduction of cost

Banks adopt new technology that reduces the cost occurs in bank and broad learning and Neural
Network used in Artificial Intelligence to learn new things like human do. This way machine
eliminated the need to write a new code every time.

5. In Banking

a) In data Analysis in Baking: Artificial intelligence can easily consume and process
large amounts of data Through the machine learning, at an expedited level.

b) Fraud Detections: Most of the industries operating and banking sectors are using the
latest technology for detection of the fraud that improves the banking performance, World
Wide Web susceptible to fraudulent users and banking is no exception. But AI learns and
monitor behavioural patterns of users to identify irregularity and warning signs of fraud
attempt along with collections of evidence necessary for conviction.

6. Advanced Data Analytics

One of the main advantages of AI is its ability to complete difficult tasks through intricate
automation, it resulting in better productivity. Based on a machine learning algorithm, AI can
quickly consume and process a massive amount of data at an expedited level. The excessive
speed brings efficiency to banking and financial services, providing scope for personalized
offerings to consumers. Machine learning makes faster decisions while carrying out actions
quickly.

7. Smart Wallet

San Francisco based start-up PFM (Personal Financial management) is the development of AI-
based smart wallet. Which help consumers make a smart decision about their money when they
are spending it.
DISADVANTAGES

Artificial intelligence is also expected to massively afflict banks and traditional financial
services. Some of its disadvantages are listed below.

1.Highly Expensive

Production and maintenance of artificial intelligence in small banks huge costs since they are
very complex machines. AI also contains of advanced software programs which require regular
updates to meet the needs of the changing environment that effect on cost. In the case of critical
failures, the procedure to reinstate the system and recover lost codes may require more time
and cost.

2. Spam Calls

Artificial Intelligence can learn and improve, it still can’t make judgment calls. Humans can
take individual occasion and judgment calls into account when making decisions, something
that AI might never be able to do. Replacing adaptive human behaviour with AI may cause to
irrespective of call and irrational behaviour within eco-systems of humans and things.

3. Distribution of Power

There is a constant fear of artificial intelligence super sending or taking over the humans.
Artificial intelligence can give a lot of power to the few individuals who are controlling and
that cause to fraud. Intelligence carries the risk and takes control away from humans while
dehumanizing actions in several ways.

4. Unemployment

Replacement of the workforce with machines can lead to wide-reaching unemployment in

banking sector. Moreover, if the use of artificial intelligence becomes nervy, people will be
highly dependent on the machines and lose their creative and intelligent power. Unemployment
causes the economy in India. With technology advancement individuals nothing to do can lead
to the devastating use of their minds. Be it banking or any other sector; Artificial intelligence
can effectively increase the unemployment rate.

Artificial Intelligence in baking services information delivered to wrong hands can turn out to
be a serious threat to humankind. If individuals start thinking destructively, they can generate
mishmash with these advanced machines.
5. Can’t think out of Box:

The robot cannot act any different outside of whatever algorithms or programming is done in
that machine. They can do only work that they are made for or programmed that limits only in
devices, and with adoption of new technology in services we can’t think out of the box.

6. Addictions

We depend on machines to make everyday tasks more efficient in bank. For Example, we have
clothes washed by washing machine instead of doing that by hand as before or they clean
dishes just by putting them into a dishwasher that leads to laziness.

Today’s generation, most of the people are depending on mobile applications like Siri, Cortona,
Google Assistance. If we don’t need our thinking abilities, these will be gradually decreased
thinking ability of humans.

7. Exploitation of artificial intelligence

Misuse of artificial intelligence is very bad. But in the case of machines, it’s worse. We hear
lots of time that misuse of technology can bring the world to the destructive end.

8. Self-Modify

Self-modify, when combined with self-replicating, can lead to dangerous, unexpected results
such as new and frequently computer virus.

The challenges introduced by the emergence of artificial intelligence revolve around many
things. However, AI is a right balance of skill and emotions which is continuously growing.
Artificial intelligence provides banks, financial institutions, and technology companies with
significant competitive advantages. It can completely transform the banking sector and make
it faster, but this will only be possible if the financial industry can manage the security risk of
systems based on AI.
 NEW FEATURES THAT ARE CHANGING ATM BANKING

1.Email receipts

If you regularly visit ATMs, you are no stranger to receipt-littered ATM lobby’s. Some
customers take the receipt simply for a quick look at their remaining balance and confirmation
of remaining available balance, while others simply expect a receipt as part of the ATM
experience. After a brief look, the receipt ends up in the trash or worse on the floor.

Banks have developed one solution to address this problem: ATM e-receipts. City bank and
Wells Fargo are two that let customers receive a digital ATM receipt via email that save paper
and eliminating the use of paper.

2. Varying bill denominations

Most ATMs only dispensed cash in the form of 20 dollar bills. In instances when exact and
complete change is needed, the ATM is not very useful. However, banks are recognizing
customers want more flexibility with cash withdrawal in ATMs.

As such, Chase and PNC have started to roll out ATMs that are capable of spitting out $1 and
$5 bills instead of just $20 bills. In addition to the convenience, being able to withdraw cash in
little denominations may also mean you won’t be taking out more than you need.

3. Card-less ATM access

Card less ATMs like our digital wallets and personal identification, our smartphones are always
by our side. More and more mobile phone manufacturers are building smartphones with near
field communication (NFC) technology, which lets your mobile phone communicate with
certain devices within close neighbourhood.

Banks plans to introduce such technology at their ATMs so customers can use their NFC-
enabled smartphones to access the ATM. One day, our smartphones may replace our ATM and
debit cards.
4. Make credit card or loan payments

You can pay your credit card bill or mortgage through the mail, online banking or a bank teller,
yet you’ve never been able to perform this task through the ATM. It would certainly be another
level of convenience that would be much appreciated by many bank customers.

Fortunately, American banks plans to offer such capabilities in the near future. All banks
planning to innovation of new things likely technological in future.

5. Live teller video conferencing

The original concept of an ATM was to eliminate the need for a human teller to service a
customer. However, banks are making ATMs poor automated by offering real-time video
conferencing with a live teller.

The Indian banking sector plan to video conferencing with live teller. These ATMs are able to
provide a branch-like level of customer service for extended hours.

ATM SERVICES

1.Open or withdraw a fixed deposit account

Present days we can open a fixed deposit with your bank using an ATM. Select ‘Open Fixed
Deposit’ on the ATM menu, select the duration, enter the amount and confirm the other
necessary details, it can save the time.

2. Recharge your mobile

Prepaid and post-paid services of most mobile operators can be recharged from an ATM that
services also available in banks. You can also recharge mobile phones of friends or family
members in the same manner. Select 'Mobile Recharge', enter your mobile number and re-
confirm the mobile number, then enter the recharge amount.
3. Pay income tax

Some banks offer to customers for convenience of paying income tax using ATMs. This
includes advance tax, income tax, self-assessment tax as well as tax due after regular
assessment. You need to register for the facility on the bank's website or visiting branch. Once
the amount is deducted from your account, the ATM will generate a unique number for
reference.

4. Deposit cash

Many Indian banks have installed cash deposit machines in ATM. One can deposit below
50,000 per transaction. Denominations of Rs 100, Rs 200, Rs 500, Rs 2000 are accepted.

5. Pay insurance premium

Insurers pay insurance premium like LIC, HDFC Life and SBI Life have tied up with banks to
facilitate premium payment through ATMs. Just keep the policy number in hand. Go to 'Bill
Pay', select insurer, enter policy number and date of birth or mobile number, then enter
premium amount and click on confirm.

6. Apply for personal loan

We can apply for loan like personal loan in ATM. You don’t need to approach a bank branch
or speak to a phone banking executive. Some private sector banks now offer pre-approved
personal loans for customers using ATMs as the point of better services. The loan amount is
decided using advanced analytics, which take into account the customer’s transaction details,
account balance, details regarding loyal customer, salary credits, and credit and debit card
repayments.

7. Transfer cash

If you do not have access to Net-banking, funds can be transferred from your bank account to
that of another bank using an ATM. You need to register the beneficiary account online or at
bank branch or at bank website. Up-to Rs 40,000 can be transferred to the beneficiary account
in a day, with no limit on the number of transactions.
8. Pay your bills

You can pay utility bills like your telephone bill, electricity bill, gas bill and others through
ATMs. You need to register the biller on the bank’s website before you can make the payments.

9. Book railway tickets

Public sector banks like SBI and Punjab National Bank, among others, offer the facility at
select locations on railway premises for booking the railway tickets. Nowadays only long
distance reserved tickets are issued this way, this service is very useful by banks through ATM
.

MOBILE BANKING WITH ARTIFICIAL INTELLIGENCE

1.Intuitive Interface

The design of the interface should be both intelligence and technology. Keep each screen
simple, clean and make buttons, numbers and text large.

2. Visualize Information

Banking apps shows the visualize information related to account that is boring, with lots of
numbers and text. Good mobile banking apps are functionally, while great ones “dress up”
otherwise dry information and make it as visually appealing as possible.

3. Quick Balance

The users can preview the account balance with a swipe no login required. This type banking
feature can help full bank customer for quick access of account balance.

4. Transaction Details

Present days app doesn’t just show the amount of payments made. It displays full contact
information for the payee, including address, phone number, email (with click-to-call option)
and a map showing where the charge was made.
5. Account Security

The banking related app maintain the better security beyond just regular passwords, users can
opt for either biometric verification using Fingerprint ID or a gesture-based password method.
These type security system hide the details of account holder.

6. Debit Card On/Off

Debit card can be Lock or unlock for security in a single tap, while the actual account itself
stays open, this is the feature of mobile banking app.

7. Customer Service

We can get help from a personal banker quickly, or set up an appointment with a financial
advisor in certain bank. Users should also be able to browse list of question and video tutorials
to get help without speaking to anyone.

8. Mobile Photo Check Deposit

Mobile photo cheque deposit is feature that can effortlessly deposit money into your account
anytime, from virtually anywhere using your mobile device’s camera. This is a must-have app
feature.

9. Mobile Photo Bill Pay

Mobile banking app users can take a photo of their bill and the app will upload all the necessary
billing information so they can set up a one-time or recurring payment in a matter of moments.

10.Branch/ATM Locator

Users should be able to accesses the locate of your financial institution’s branches and ATMs
based on either their current GPS location or a search function. Results should shows the baking
hours of operation and phone numbers, photos of branch. It’s very helpful to customers.

11. Personal Financial Management Tools

User can see the aggregate and manage money with goals, spending alerts, spending categories
and visual tools.
12. Safe-to-Spend

User can spent their available balance in different forms that removes the misleading. It’s
another thing to know exactly how much you have available to spend. Users should be able to
know how much they have left after their scheduled bill payments, pending transactions and
savings goals have been accounted for.

13. Receipts

Users can take photos of receipts in mobile that can to help them keep track of expenses. This
is the main advent feature.

14. Person-to-Person Payments

Using this type of apps user can pay quickly and securely transfer money to anyone at any time
using just their mobile phone number or email address.

15. Travel Notification

Users can the notification regarding their financial institution know they will be traveling. All
it takes is a swipe or tap.

16. Personalization/Customization

Users can quickly view a list of their most recent actions in the account listing recurring bill
pays. They can customize their menu, dashboard or interface to suit their needs/situation. They
can personalize their profile, with a nickname and referral ID, photo.

17. Credit Monitoring

The best credit monitoring app for android phones displays the user’s credit score, updated
monthly.

18. Mobile Photo Account Opening

A user can snap a picture of their driver’s license, voter ID and be on their way to opening a
new account in less than five minutes. It’s a handy feature when the need arises, but one that
will probably be used fairly rarely.
 CHAPTER 2

RESEARCH DESIGN
 DESIGN OF THE STUDY

2.1 TITLE OF THE STUDY

A Study on Role and Impact of Artificial Intelligence on Banking Services

2.2 STATEMENT OF THE PROBLEM

The problem statement for the present study can be state as entitled “A Study on Role and
Impact of Artificial Intelligence on Banking Services” and to evaluate the present technology
in banking services and also methods of technology in banking services. The future
advancement in banking with artificial intelligence or technology like mobile banking, online
banking and transaction through electrical devices.

2.3 NEED FOR THE STUDY

Artificial intelligence is very important in present generation on banking service and other.
Now a days the fast technology advancement in banking services is very good by providing
online banking services and mobile banking. Artificial intelligence is much role in providing
banking services to peoples. The technology in banking lot of changes occurs in ATM
machines, transaction through online and technology plays a vital role in banking services.

2.4 OBJECTIVES OF THE STUDY

 To know the advantages and disadvantages technology advancement in banking

services.
 To know the present scenario of artificial intelligence in banks.
 To know the positive and negative impact of technological innovation in banking
services.
 To know the role of AI in banking services.
 To know about the fraudulent activities in banking services through online transactions.
 To find the conclusion and make suggestions on the base of the study.
2.5 SCOPE OF THE STUDY

Artificial intelligence in banking services creates a stronger to work on, by making banking
processes problem-free. Artificial intelligence cloud computing, blockchain and digital
dashboards are some of the latest technology that are helping banks to provide better services
and automate their systems. AI is working on providing personalized support, high-quality
customer experience, speed and efficiency and cost saving.

2.6 REVIEW OF LITERATURE

According to Cristani : The concept of banking in artificial intelligence has been discussed
under some general arears, which include complexity of banking services, sampling algorithm,
efficient methods, logic and consistency.

Nathaniel : the economic times new paper, after the financial crisis 10 years ago, unhappy
customers were expected to feel the megabanks for smaller competitors. It didn’t happen. And
the big banks became even more entrance. Now another wave of alternative banks are at it
again, and they say they’ve learned from the mistake of the upstarts banks.

kumba sennaar “Artificial Intelligence in Baking” The analysis of 7 top banks: While tech
giants tend to hog the limelight on the cutting-edge of technology, AI in banking and other
financial sectors is showing signs of interest and adoption – even among the stodgy banking
incumbents.
“Artificial Intelligence in Indian Banking” published by Kul Bhushan in Jul 2018 : Artificial
intelligence in banking is more than about chat bots. Here’s why banks, especially in India,
should consider using the technology, allowing more and newer industries to adopt the artificial
intelligence for various applications.

“artificial intelligence lead in UK banking” published by tom graham in 2016

“Redefined banking with artificial intelligence” published by Accenture

The future of banking; the role of information technology” published by matej marinc in Sep
2015 : Transforming individual banks and the entire banking industry. Even though the basic
economics of banking have not changed, IT developments may lure banks into transaction
banking.

Journal of banking and finance” published by Marinc in 2010

“Determinants and outcomes of internet banking adoptions” published by parkes in 2015

“Artificial intelligence impact in banking and financial services” Milano(2017): The banking
sector has always been the driving force behind the application of new technologies: automation
has been used for back office and operations since the 1960s. Investments in Artificial
Intelligence have grown during the ‘80s in the form of expert systems.

“Rise of Artificial Intelligence in Banking” published by Babu Rajnish in July 2016

2.7 RESEARCH GAP

Though the handful of works on artificial intelligence in banking services and their related
activities regarding the process, performance of technology and prospects are found, most of
the projects or studies have been done during pre-reform period. In the post reform period,
enormous changes have been taken place in the banking sector. Artificial intelligence is still
relatively rare in the banking world.

2.8 RESEARCH METHODOLOGY

Research design is the basic framework for the study. Research methodology is used to
examination of the issues reliably. It includes collection of proper information utilization of
factual approaches, clarification and representation decisions about research information.

Descriptive research

Descriptive research is used to describe the applications in the accurate and correct way.
Descriptive is all that describing the individuals who take part with the study.
Research design

The study shall consist of the collecting the data mustered from the sample respondents and
the data would be used for analysis and thence reporting the same in various parts. Thus,
method used in this study is a sampling.

Sources of Data

The data is collected from both the primary and secondary sources.

 Primary data - Primary data is the data collected by investigator himself for the first
time of a specified study. The primary data can be collected by observations, survey
method. The data is proposed to be collected through structured questionnaires and also
through personal interactions and observations.

 Secondary data – Secondary data refers to the data which is already exist or
collected by someone before it include published records, journals, magazines, articles,
books, CDs, websites and newspapers, so on.

SAMPLING Sample Size : 50

Sampling unit : who are customer to banking services in

Bangalore city.

Sampling technique: Simple Random technique.

Plan of Analysis: The data captured would be presented in tables and charts depending on
the parameters. Statistical tools such as percentages, mean score and standard deviation would
be employed to analyse the data and the report would be classified into various sections as
required.

2.9 LIMITATIONS OF THE STUDY

 The study only conducts in Bangalore city.

 Time period of research project is very short.
 The sample size taken is small.
 The result of the project is based on questionnaire.
 CHAPTER 3

PROFILE OF SAMPLE
RESPONDENTS
In this chapter the researcher has made an attempt to find the profile of customers of banks for
the study of A Study on Role and Impact of Artificial Intelligence on Banking services

An attempt has been made to analyse the sample of banks customers such as gender, age,
educational qualification, annual income, type of banking services, performance of technical
services.

1.Gender wise classification

Gender Number of Respondents Percentage

Male 40 80

Female 10 20

Total 50 100

From the above table it is shown that the majority of the respondents are male it amounts to
80% and the remaining 20% of them are female respondent are using the banking services and
involved banking activities.

2.Distribution of respondents based on their age factor

Age Frequency Percentage

20-30 32 64
30-40 13 26
40-50 4 8
50 and above 1 2
Total 50 100

From the Above table represents the different age group of the respondents and their percentage
composition. The majority of the respondents are of the age group between 20 to 40 years of
age using banking services and involved in the banking activities .
3.Distribution of respondents based on their education

Qualification Number Percentage

SSLC 4 8
PUC/ITI/Diploma 8 16
Graduate 22 44
Post graduate 16 32
Total 50 100

The above table represents the data pertaining to the education qualification of respondents. As
most of the respondents are having the education level of graduate is more when compare to
other qualifications and only some of the respondents are below PUC education level. Post
graduate are less in comparison with graduate.

4. Distribution of Respondents based on their annual Income

Income Number Percentage

below 1lakh 10 20
1lakh to 5lakh 20 40
5lakh to 10 lakh 4 8
10 lakh and above 0 0
Not earning presently 16 32
Total 50 100

The above table shows the majority of the customers to bank having an income ranging
between 1 lakh to 5 lakh. In this table the banking customer are not earning above 10 lakh
income per annum. Below 1 lakh earning people are 20% 11 respondents. Some of the
respondents are not earning presently 32% of 16 respondents and it shows the earning level of
customers.
5. Distribution of customers to bank based on service utilisation

services Number Percentage

ATM services 12 24

Mobile banking 30 60

Online baking 8 16

Total 50 100

From the above table show the distribution of bank customers based on their services utilisation
in the banking technology. The most of the respondents of 30 are using the mobile banking
services when compare to ATM services. Nowadays most of the people are using mobile
banking and online baking.
 CHAPTER 4

DATA ANALYSIS AND

INTERPRETATION
Introduction
The opinions of the respondents play a significant role in getting details relating to marketing
of agricultural produce. By considering these a study of a set of personal characteristics viz,
Name, Age, Sex, Education, Occupation, Income so on are examined in order to carry out this
research.

1. Gender

Table 4.1

Gender Number Percentage

Male 40 80
Female 10 20

Total 50 100
Analysis: The above table is showing the gender summary of the respondents, the table
shows that there were 80% respondents were male and remaining 20% were female
respondents.

70
Gender
60

50

40

30

20

10

0
male Number Percentage female

Graph 4.1.1

Interpretation:

The above chart interpreted that greatest of the respondents were male and not so many were
females. This implied that there were more males are cooperated with the investigators through
the study and more male are using services.
2. Age of Respondents:

Age of respondents is very important in understanding the views of particular problem. we can
get the more matured responses in the field of agriculture.

Table 4.2

Age Frequency Percentage

20-30 32 64
30-40 13 26
40-50 4 8
50 and above 1 2
Total 50 100

Analysis: From the above table shows the total respondents about 64% of the people are of
the age group between 20 to 30 years of age. 26% of the people are of the age group between
30 to 40 years of age. About 8% of the people are of the age group between 40 to 50 years of
age and the remaining 2% are of the age group above 50 years.

Graph 4.2.1

Chart Title
5

4.5

3.5

2.5

1.5

0.5

0
20-30 30-40 40-50 50 and above

Frequency Percentage
Interpretation

According to the above chart it is clear that maximum of the respondents are young aged people
who were having less than 40 years old. It is clear that the people who are having the young
age and the capacity of involving banking services activity is more and they are intentionally
involve banking services for more requirements.

3.Educational Qualification

Table 4.3

Qualification Number Percentage

SSLC 4 8
PUC/ITI/Diploma 8 16
Graduate 22 44
Post graduates 16 32
Total 50 100
Analysis: The above table shows that the educational qualification of the respondents. Out
of 50 respondents 16 were the post graduates and 22 respondents are the graduates and the 8
respondents are intermediate and only 4 respondents are SSLC or below.

Graph 4.3.1

Qualification
50
45
40
35
30
25
20
15
10
5
0
SSLC PUC/ITI/Diploma Graduates Post graduates

Number Percentage
Interpretation:

According to the above chart it can be stated that educational qualification of the respondents.
According to the study the customers who are involved in banking services activities are more
in case of graduates and post graduates because some of the education is required for those
services. It can be understand that people are in city areas are have more education.

4. Income

Table 4.4

Income Number Percentage

Below 1 lakh 10 20

1 lakh to 5 lakh 20 40
5 lakh to 10 lakh 4 8
10 lakh and above 0 0
Not earning presently 16 32
Total 50 100

Analysis:
Above table is showing the income level of the respondents. Out of 50 respondents no one is
having the income more than Rs 10 lakh. 40% of people are having the income of 1 lakh to 5
lakh and 20% of the people are having the income of below 1 lakh and most of the respondents
are not earning the income presently because 32% of respondents are unemployed or students
presently.

Graph 4.4.1
 Income
45

40

35

30

25

20

15

10

0
below 1 lakh 1 lakh to 5 lakh 5 lakh to 10 lakh 10 lakh and above not eraning presently

Number Percentage

Interpretation:
From the chart we found that the income of customers of bank, most of the customer are earning
their income 1 lakh to 5 lakh of 40% is shown. No one can earning the above 10 lakh income
as my survey.
5. Most liked banking services
Table 4.5.1

Services Number Percentage

ATM services 12 24

Mobile banking 30 60

Online banking 8 16

Total 50 10
Analysis
From the above table 60% Of the customers using the mobile banking services and 24% of
customers like the ATM services facility, 16% of respondents are liked the online banking
services through electronic devices. These analysis shows that the most of the customers are
requiring the services with new technology.

Graph 4.5.1

Services
70

60

50

40

30

20

10

0
ATM services mobile banking online banking

Number Percentage

Interpretation: From the above chart most of the customers are using mobile banking
services when compared to other services provided by bank, and ATM services are using by
the customer but lesser than the mobile banking. Now days all people are using online and
mobile banking that save their time and money.
6. Technology advancement in banks

Table 4.6.1

Category of banks Number of respondents Percentage

Public sector banks 15 30

Private sector banks 35 70

Total 50 100

Analysis : From the table the most of the respondents are giving their opinion on the banks
which type of the banks are technologically advancement in the services provide. Private sector
banks are giving most technological advancements in services provide comparison with public
sector banks.

Graph 4.6.1

Category of banks
80

70

60

50

40

30

20

10

0
public sector banks privatesector banks

Number of respondents Percentage

Interpretation

From the above chart show which category of banks are most technologically advancement, in
that more private sector banks are adopting the advanced technology with 70% and 30% of
public sector banks are involve in the technology for banking.
7. Banking timings

Table 4.7.1

Timings Number Percentage

Early morning 4 8
Day timing 42 84
Late evening 4 8
Total 50 100

Analysis
From the above table most of the respondents are prefer the day timing to banking services
with 42 respondents, and rest of the few members are prefer the early morning and late evening.

Graph 4.7.1

timings of banks
90

80

70

60

50

40

30

20

10

0
early morning day timing late evening

Number Percentage

Interpretation
The above chart shows 84% of respondents are prefer the day timing for their banking
activities, and remaining few people are prefer the early morning and late evening with their
convenience for banking.
8. Attribute of banks do you value most
Table 4.8.1

Attribute Number Percentage

quality of service 11 22

Technology used 23 46
Trust 6 12
location 4 8
Type of bank 6 12
Total 50 100

Analysis : The table indicate the most of the respondents are like the technology used in the
banking services with 23 respondents are given, rest of the people like the quality of services,
type of bank, and nearest location of the bank. In these days all are using the technological
services through electronic devices.

Graph 4.8.1

attribute of bank
50
45
40
35
30
25
20
15
10
5
0
quality of services technology used trust location type of bank

Number of respondents Percentage

Interpretation : The above chart show that 46% of respondents are like the technology used
in their banking services with newest artificial intelligence, and remaining respondents are like
the type of bank with 12%, trust in bank with 12%, quality of service with 22%, bank located
in their nearest areas and finally technology of banks used in services are most important.
9. Robotic banking in future
Table 4.9.1

Responses Number Percentage

Yes 37 74
No 13 23
Total 50 100

Analysis
From the above table demonstrate that the total number is respondents is 50 out of that the
positive response about robotic banking in future is given by 37 respondents and negative
response given by 13 respondents which is equivalent to 73% and 23% respectively.

Graph 4.9.1

Robots banking
80
70
60
50
40
30
20
10
0
YES NO

Number of respondents Percentage

Interpretation
The above chart interpret that the number of respondents are requiring robotic banking in future
for better quality of services, in this some of the members are not requiring advanced
technology in baking services.
10. How do rate
Table 4.10.1: showing that how customers rated for banking services with technology

Particulars Excellent Good Neutral Poor Very poor

ATM services 27 23 0 0 0

SMS alert 21 15 14 0 0

Statement 15 25 10 0 0

Internet banking 35 12 3 0 0

Telephone banking 5 8 25 12 0

Mobile banking 41 9 0 0 0

Analysis :

From the above table it can be analysed that 54% respondents feel excellent with the ATM
services , 46% of the respondents are feel like good, and no one can feel like neutral, poor, very
poor with 00% of respondents.

From the above table it can be analysed that 42% of the respondents feel excellent with SMS
alert system, 30% of the respondents feel good, 28% feel like neutral, 00% of respondents feel
with poor and very poor.

From the above table it can be analysed that 30% of respondents feel excellent with statement
request through online, 50% feel good, 10% feel neutral, 00% of respondents are feel poor and
very poor with statement request.

From the above table it can be analysed that 70% of respondents feel excellent with internet
banking through online, 24% of respondents feel good with that, 6% of respondents feel
neutral, 00% of response come like poor and very poor.

From the above show the most of the respondents are feel bad with telephone banking services.

From the above table it can be analysed that 82% of respondents feel excellent with mobile
banking, 18% of response is good, 00% of remaining aspects.
Graph 4.10.1

Rate for banking services

45

40

35

30

25

20

15

10

0
ATM services SMS alert Statement Internet banking Telephone Mobile banking
banking

Excellent Good Nuetral Poor Very poor

Interpretation

From the above graph it ca bee interpret that majority of the respondents are feeling excellent
with ATM services, internet banking services, mobile banking services through online. The
telephone banking is not satisfy the customer services comparison with other banking services.
The overall services by bank is based on technology advancement.
 CHAPTER – 5

FINDINGS, SUGGESTIONS
AND CONCLUSION
FINDINGS

 It was found that majority of the respondents are know the information about artificial
intelligence in banking services. It was also that majority of the respondents are using
modern technology in banking services.
 It was also found that majority of the respondents feel very satisfactory with overall
quality of banking services, majority of the respondents are very satisfaction with
technology advancement adopted by banks for improving their performance level.
 Lack of knowledge because utilisation of banking services with latest technology need
some of the knowledge of internet usage.
 The mobile banking offers the opportunity of establishing a personalised connection
with existing customers communicating with the target customers at low costs.
 As banking services with technology is based on the internet available, without
network technological services are not available.
 It was also found majority of the respondents feel that the performance of the attributes
is extremely important.
 Cell phone banking is cost effective. Different banks provide this facility at a lower cost
as compared to banking by self. Baking through mobiles reduces the risk of fraud. You
will get an message whenever there is an activity in your account. This includes
deposits, cash withdrawals, funds transfer etc. you will get a notification as soon as any
amount is deducted or deposited.
 Banks can be in touch with their clients with online baking, telephone banking, mobile
banking. Banks can promote and sell their products and services like credit cards, loans
etc. to specific group of customers.
 People can use m-payments to pay utility bills, shopping bills, recharge, purchase movie
tickets, insurance premiums through technology.
 This services shall be restricted only to customers of banks as per the extant Reserve
bank of India guidelines.
SUGGESTIONS

 Need to develop sophisticated banking services with latest technology namely robotic
banking.

 Give the knowledge about technological education to customers regarding online

transactions, e-payments, electronic channels.

 There is need for good network facility for effective services.

 Financial Institutions such as banks see m-commerce as offering new channels of

services to customers as well as offering them new and innovative services.

 When a banks offers e-payments services, it may be ensured that customers having
electronic devices for utilisation of that services.

 Conduct periodic risk management analysis, security vulnerability assessment of the

application and network etc at least once in a year.

 Maintain proper and full documentation of security practices, guidelines, methods and
procedures use in electronic or online banking and payment system and keep them up
to date based on periodic risk management.
CONCLUSION

The rapid development of communication and transportation, people and services are coming
together as if they were just around the corner. If this is the case for many services, then why
should the banking service industry lag behind? E-channels enable the banks to be better
connected with the customer and vice versa. In the present artificial intelligence plays a vital
role in the banking services with advanced technology.

Online banking with artificial intelligence is popular among consumers using electronic
devices. Changing dynamic reveal a shift toward new electronic devices coming to market.

Online banking had given more freedom to customers to deal with their accounts without
requiring them to actually step into a branch. Mobile application based banking is poised to be
a big m-commerce features; mobile banking is poised to become the big killer mobile
application arena.

In conclusion we can say that artificial intelligence in banking services is well known to the
customer by its quality of services and new technology.
BIBILIOGRAPHY

BOOKS

 D Muraleedharan “Modern Banking and Information Technology” by Universal Law

Publishing co. ltd
 J Chandradass “Banking and Financial System” by Himalaya Publishing House
 H.R. Machiraju “Modern Commercial Banking” by New Age International Publishers
 Peter S. Rose “Bank Management and Financial Services” by Himalaya Publishing
House
 Dr K Nirmala Prasad “Banking and Financial System” by Himalaya Publishing House
 Hrishikesh Bhattacharya “Banking Strategy and Credit Appraisal” by Himalaya
Publishing House

WEBSITES

https://www.indianbank.net.in

https://www.researchgate.net

https://www.business-satandard.com

https://www.nelito.com/blog/ai-and-its-impact-on-the-finance-industry.html

https://internationalbanker.com/banking/how-ai-is-disrupting-the-banking-industry

https://www.globalbankingandfinance.com/banks-are-splashing-artificial-intelligence