FACTORS INFLUENCING AI ADOPTION IN BANKING INDUSTRY- A STUDY WITH SPECIAL REFERENCE TO COIMBATORE CITY

Abstract

The Indian banking industry is undergoing rapid transformation due todigital technology and Artificial Intelligence (AI) is emerging as a key enabler of operational efficiency, customer engagement and competitive differentiation. This study investigates the factors influencing AI adoption in the banking industry in the context of Coimbatore City. Drawing on empirical data collected from employees of selected banks in Coimbatore, the study applies factor-analysis techniques to identify the underlying latent constructs that drive AI adoption in banks. Fifteen variables representing technological, organisational, environmental and human dimensions of AI adoption are examined. The study further explores how these constructs influence the level of AI adoption and proposes managerial and policy implications. The findings reveal that constructs such as Top-management Supports and Strategic Vision, Technology Infrastructure Readiness, Data Security and Regulatory Compliance, Human Skill Change Management and Customer-centric Value Perception have strong loadings and significantly influence adoption levels.The study makes a local contribution by focusing on Coimbatore City bank and morebroadly, by applying the Technology–Organization-Environment (TOE) framework to AI adoption in banking in a developing economy context. The paper concludes with recommendation for banks executives and regulators on how to accelerate and succeed with AI adoption through integrated strategies focused on infrastructure, talent, trust and governance.