Fusion of Artificial Intelligence and Blockchain in the Banking Industry: Current Application, Adoption, and Future Challenges

Abstract

Digital transformation has made enormous changes in the banking domain, where FinTech is the salient driving force inside it. Especially in the banking industry, Artificial Intelligence (AI) and Blockchain technology act as the most innovative technologies. Similarly, Chatbots in commercial banking and Robo-advisors in investment banking has shifted banks into the entire virtual environment. In this context, the main objectives of this chapter are: to determine the current application of AI and blockchain in the banking industry, to identify the challenges faced by banks in adapting AI and blockchain technology, and to provide new insights on future banking in the industry 5.0 in this digital era. This chapter discusses the application of two robotic platforms widely used in banking, chatbots, and Robo-advisors. Chatbots are more like frontline employees of banks who are commonly engaged in customer relationship management, sales, and marketing. In contrast, Robo-advisors are a relatively advanced AI tool involved in investment and portfolio management. Blockchain will accelerate digital transformation where a decentralized digital ledger system is used for banking transactions. However, this is entirely the opposite of conventional centralized digital banking, and the adoption of these technologies is still in its infancy. Employment, performance, security, privacy and trust, cost, ethical and regulatory challenges are the most common challenges. To avoid the challenges, banks should concern with strategies like collaboration with robots, increasing the platforms’ performance, etc. Finally, the chapter provides insights on banking at industry 5.0. In the future, banking customers can experience completely virtual and customer-oriented banking services. In this regard, the fusion of all technologies and collaborative human effort is essential.

Citation

Dewasiri, N.J., Karunarathne, K.S.S.N., Menon, S., Jayarathne, P.G.S.A. and Rathnasiri, M.S.H. (2023), "Fusion of Artificial Intelligence and Blockchain in the Banking Industry: Current Application, Adoption, and Future Challenges", Saini, A. and Garg, V. (Ed.) Transformation for Sustainable Business and Management Practices: Exploring the Spectrum of Industry 5.0, Emerald Publishing Limited, Leeds, pp. 293-307. https://doi.org/10.1108/978-1-80262-277-520231021