The Role of AI In Enhancing Customer Experience in Retail Banking: A Study of A leading commercial bank in Sri Lanka

Abstract

Retail banking has embraced the rapid adoption of artificial intelligence (AI) and this has fundamentally changed the customer engagement and service delivery models. The study is a mixed-method analysis of the effects of AI-based technologies on the customer experience of A leading commercial bank in Sri Lanka, the largest and most popular bank of the Sri Lankan private sector. The study explores five aspects of AI application, including chatbots, personalization, data analytics, process automation, and security features through a quantitative examination of 109 customers of retail banking and qualitative interviews with five banking professionals.

The results indicate that, the AI technologies as a bloc can be used to explain 32.6 percent of the variance in customer experience results, with AI Process Automation (0.295, p = 0.002) and AI-Driven Personalization (0.228, p = 0.013) showing the most significant predictive power. Qualitative analysis demonstrates that there are implementation difficulties such as the chatbot constraints in multilingual environments and the infrastructural purpose of data analytics. The research is able to confirm that the COVID-19 pandemic hastened the adoption of digital banking by about five years, which remain behavioral changes. The results can be used in the literature on technology acceptance in the emerging markets and offer the evidence-based recommendations to the banking institutions that are more focused on the AI investments in automation and personalization accompanied by the consideration of the issues related to the customer segment heterogeneity and digital divide.