Introduction

Artificial intelligence (AI) is a multidisciplinary field that includes information, logic,

cognition, thinking, systems, and biology. It has been used to process knowledge, recognise
patterns, acquire machine learning, and process natural language. The term "Artificial
Intelligence" refers to a broad range of technologies. The financial services (FS) sector,
frequently the global bellwether industry, has begun an AI-led transformation journey using
advanced technologies like collaborative filtering, support vector machines, and deep learning.
AI-based pred1ictive modelling, automated manual tasks, robotic assistance/chatbots, and deep
learning are also being used. This innovation has the potential to completely change how we
interact with computers, making them more effective and user-friendly. As well as enhancing
the overall user experience, it might result in the creation of new goods and services.
AI is also a research tool for many incredible and novel applications. Application of AI in e-
Commerce, Personalised Shopping, AI-Powered Assistants, Fraud Prevention, Applications of
Artificial Intelligence (AI) in Education, Applications of AI in intelligent manufacturing,
Applications of AI techniques to combat cyber-crime, Applications of AI in medical field, such
as dermatology, cardiology, fighting against Covid-19, Emerging applications of AI in neuro-
oncology, Applications for protein 3-D structures.
Automation has gained popularity. This kind of disruption has occurred before in the history
of mankind. We were forever changed by the development of the wheel and the pulley, which
also lessened our reliance on manual effort. Through AI-based automation, innovation is this
time decreasing our intellectual labour as well. People are undoubtedly sitting up and paying
attention to the disruption as a result. Millennials are great to work with, and their contributions
are certainly commendable. especially receptive to improvement and change. There was a
shortage in prior generations; starting salaries were modest and career possibilities were scarce.
This at the time generated a new kind of hunger that drove us to advance in life. The millennial
generation, in contrast, does not currently feel that kind of strain. Of course, having knowledge
of cutting-edge technologies is also advantageous.
Review of literature

1. A. Geetha & Dr. M.G.R, 2021- A study on AI in banking and financial services. This article
has the secondary sources of data to identify the information availed in the banking and
financial services in Chennai to get a look on the implementation of AI methodology in banks
as well as from customers and it resulted as the satisfaction is found is some people only. The
authors suggested in improving the procedures with innovative services at the workplace for
customer friendly.

2. Dr. Navleen June 2020: Kaur, Dr. Monika Sharma, Laraibe Siddiqui, and Supriya Lamba
Sahdev. Artificial intelligence's impact on the banking sector and how it is transforming the
look of contemporary banks are discussed in Banking 4.0. The primary focus of this essay is
the application of AI in the banking sector, specifically the revolutionary changes in banking
and their effects on the human labour. Since dealing with automation requires new technologies
and expertise.

1
3.Ana Fernandez, 2019, “Artificial Intelligence (AI) in financial Services”- the author
describes that the investors are benefited by the usage of AI application in finance sector as it
still undergoes with risks and limitations involved. So, by having use of the AI tools as a
process involved in making out decisions and in major activities offers a fair steadiness with
the risk and rewards.

4.Chan, Nayler, Raman, & Baker, 2019- The financial services diligence has an antiquity of
expending computable approaches and a set of standards to support assessment making. These
are the basis of AI coordination, and the trade is consequently well-informed for AI
implementation, placing it at the lead of employing and promoting since AI knowledge.

5.Previous comparative studies have explored AI adoption and its impact on decision-making
across different industries and organizational contexts (Liang et al., 2019). However, limited
research focuses specifically on the comparative analysis of AI applications within financial
services companies operating in distinct geographic regions, such as Guntur district.

Need for the present study

The need for studying arises from several key reasons:

1.Emerging Technological Trends: AI technologies are rapidly transforming various sectors,

including banking and finance. Understanding how these technologies are being adopted and
their impact on local financial services companies is crucial for staying competitive and
innovative.

2.Local Contextual Analysis: Guntur district, like many other regions, has unique economic
and demographic characteristics that influence the adoption and impact of AI in banking.
Studying local financial services companies provides insights into how AI strategies are
tailored to regional market conditions and customer demographics.

3.Business Strategy and Decision Making: Financial institutions in Guntur district need
empirical evidence on how AI can enhance operational efficiency, improve customer
satisfaction, and mitigate risks. This study can provide data-driven insights that inform strategic
decisions regarding AI adoption and investment.

4.Regulatory and Compliance Implications: The integration of AI in banking and financial

services is accompanied by regulatory challenges and compliance requirements. Examining
how local companies navigate these challenges can offer lessons and best practices for
regulatory adaptation and implementation.

5.Customer Experience and Expectations: AI technologies have the potential to reshape

customer interactions and service delivery in banking. Understanding customer perceptions
and experiences with AI-powered services in Guntur district helps in refining AI strategies to
meet evolving customer expectations.

6.Educational and Developmental Opportunities: Conducting such a study also contributes

to educational purposes by providing valuable insights for academia, policymakers, and
industry practitioners interested in AI's role in regional economic development and financial
services innovation.

2
Objectives of the study

1.To study evolution of AI in the of areas banking and financial services industry.

2.To assess the profitability of banks after adoption of AI

3.To study the impact of AI in terms of quality of services in the areas of banking and financial
services industry.

4.To Assess the Current Adoption Levels of AI.

5.To Examine Challenges Associated with AI Implementation.

6.To Identify AI Technologies Adopted.

Research methodology

An effort is made to deduce specifics concerning India's adoption and implementation of AI

in banking and financial services in this regard. There are primary and secondary sources for
the data. Research papers, web magazines, e-books, newspapers, and other sources will be
utilized to gather secondary data, while a survey on artificial intelligence in banking and
financial services in Guntur will be used to get primary data. This study's research design
combines an exploratory and descriptive methodology

Limitation of the study

1.This study is limited to Guntur city only and the results of the study cannot be generalized.
Due to time and cost constraint, the study is restricted only to certain region and to certain
banks only. Therefore, it cannot represent for the other regions in Andhra Pradesh.

2.The choices of the banks for the study are randomly selected based upon few criteria’s like
size, AI Involvement and geographically located in Guntur.

3.The study is limited to managerial attitudes and the respondents included in the study are
middle Managers i.e., mangers at the branch level only. No questionnaire has been distributed
to top managers and regional managers and lower level managers.

4.The results cannot be generalized to other sectors. The results are applicable only for banking
sector in the selected banks in Guntur. In spite of this limitation, the researcher has made an
earnest attempt to collect as much as possible, analysed and presented the same in the thesis.

5.Another restriction is about study experience of the author. Although being interested in the
study and knowing how to manipulate the data, it is not easy to avoid some errors. However,
there are not any mistakes found here so far. These issues will be recommended for the future
research.

3
Findings of the study

1.A majority of financial services companies in Guntur district have adopted AI technologies
to some extent, primarily in areas such as customer service automation, risk management, and
fraud detection.

2. AI-powered chatbots and virtual assistants have revolutionized customer interactions in

banking. These systems can handle customer queries, provide personalized recommendations,
and assist with financial planning. Through natural language processing and machine learning,
AI systems can understand and respond to customer needs more effectively, leading to
improved customer satisfaction.

3. AI algorithms can analyze vast amounts of data and identify patterns that humans might
miss. In banking, AI is used for fraud detection by analyzing transactional data and identifying
anomalies or suspicious activities. AI can also assist in risk assessment, credit scoring, and
underwriting processes by evaluating customer data and predicting default probabilities

4. AI allows banks to offer personalized financial products and services tailored to individual
customer needs. By analyzing customer data and preferences, AI systems can recommend
suitable banking products, insurance policies, and investment options. This personalization
enhances customer engagement and strengthens customer loyalty.

5. AI can help banks identify and mitigate operational risks by analyzing historical data,
identifying patterns, and predicting potential risks. This includes identifying system
vulnerabilities, network breaches, and cybersecurity threats. AI can continuously monitor
systems, detect anomalies, and provide early warnings to prevent potential operational
disruptions.

Suggestions of the study

1.It's important to consider that while AI adoption brings numerous benefits, it also raises
ethical and regulatory considerations.

2.Financial institutions must ensure transparency, accountability, and fairness in their AI

systems to maintain trust and avoid potential risks. AI and machine learning algorithms have
transformed trading practices in financial markets.

3.High-frequency trading systems analyse vast amounts of market data in real-time, allowing
for faster and more accurate decision-making. Use of these algorithms can identify patterns,
predict market movements, and execute trades at optimal times, resulting in improved trading
outcomes.

4.To emphasize the importance of providing multiple communication options to cater to

different user preferences and enhance the overall user experience in AI-powered banking and
financial services.

Conclusion of the study

In conclusion, the adoption of AI in banking and financial services in Guntur district has shown
promising results in terms of efficiency, customer experience, and security. However, careful

4
consideration of regulatory frameworks and ongoing investment in AI capabilities will be
crucial for sustaining these benefits in the long term.

The implementation of AI in the banking industry has resulted in several benefits that positively
impact financial performance. AI-powered systems can analyse vast amounts of data quickly
and accurately, enabling banks to make informed decisions, improve risk management, and
optimize operations. These efficiencies can lead to cost reductions, increased productivity, and
enhanced customer experiences

References

1.“Artificial intelligence innovation in financial service” by Margarete Biallas and Felicity O’

Neill, published in June 2020.

2.Banking 4.0: “the influence of artificial intelligence on the banking industry & how ai is
changing the face of modern-day banks” by Dr. Navleen Kaur, Supriya Lamba Sahdev, Dr.
Monika Sharma, Laraibe Siddiqui, published in IAEME, Volume 11, Issue 6, June 2020.

3.“Artificial intelligence in financial services” by Ana Fernandez, published in economic

bulletin 2/2019 analytical articles, 29 March 2019.

4.“Artificial Intelligence in Financial Services” by Reza Mardanghom and Henrik Sanda,

published in Norwegian School of Economics Bergen, Fall 2019.

Web references

AI and Cognitive Technologies in Financial Services

https://www2.deloitte.com/us/en/insights/focus/cognitive-technologies.html

How AI Is Transforming the Finance Industry

https://www.forbes.com/sites/joemckendrick/2023/02/24/artificial-intelligence-opens-up-
the-world-of-financial-services/