The Impact of Artificial Intelligence Technologies on Enhancing the Performance of the Banking Sector: A Case Study of the United Arab Emirates

-

Abstract

This study aims to analyze the impact of artificial intelligence (AI) technologies on enhancing the performance of the banking sector by evaluating the effects of various AI tools on operational efficiency and service quality. It further explores the extent to which AI contributes to strengthening banking innovation and achieving competitive advantage through its application in administrative, service, and digital functions within the banking industry. The study employs monthly data for the period 2021–2024 and adopts the Autoregressive Distributed Lag (ARDL) model to examine the relationships among the study variables. The findings indicate that AI serves as a key driver in improving the operational efficiency of banks in the long run, although the strength of its impact varies depending on the specific technologies used. Machine Learning (ML), Process Robotics Automation (PRA), and Smart Customer Service (CS) demonstrated a positive and statistically significant effect on operational efficiency. In contrast, Predictive Risk Analysis (PR) showed a positive but statistically insignificant relationship. The study concludes that a long-run equilibrium relationship exists between AI technologies and the operational efficiency of the banking sector.