ARTIFICIAL INTELLIGENCE ADOPTION AND FINANCIAL EFFICIENCY IN DEPOSIT MONEY BANKS

Abstract

This study explored the influence of the adoption of Artificial Intelligence on financial outcomes of deposit money banks between 2017 and 2023. It adopted ex-post facto research design in the study. A sample size of eight (8) banks was purposively selected from among twenty-four (24) deposit money banks. Secondary data were gathered from the selected sample. Analysis of the panel data revealed average values of 19%, 33.73%, 6.08%, and 25.52% for cost reduction, profitability, return on assets and revenue growth respectively, across the deposit money banks. There were strong positive correlations among investment in artificial intelligence and all the dependent variables of financial performance. The regression analysis showed that artificial intelligence investments contributed significantly to cost reduction, with coefficient of 1.089 at p < .01; profitability, with a coefficient of 1.156 at p < .01; return on assets, with a coefficient of .527 at p < .01; and revenue growth, with a coefficient of 1.089 at p < .01. The study concluded that the adoption of artificial intelligence by deposit money banks enhances and transforms their operational efficiency. It therefore recommends that Nigerian deposit money banks should prioritize investments in artificial intelligence infrastructure. Banks should also leverage artificial intelligence to diversify revenue streams and enhance customer personalization.