Journal Press India^®

Author Details ( * ) denotes Corresponding author

This fundamental purpose of this study is to evaluate the financial performance of SBI and HDFC Bank in India before and after the implementation of artificial intelligence applications using CAMEL analysis. The study considers 6 years, FY 2013-2016 as pre- AI adoption period and FY2018-2021 as post AI adoption period. And the years 2017 and 2018 is regarded as a cooling time for the technology implementation as the selected banks, State Bank of India (SBI) and HDFC, introduced AI applications in 2017. The research is based on secondary sources and the data is obtained from audited reports of respective banks and other academic publications. SPSS and MS Excel are used for statistical analysis and test like paired sample t test were applied. The results revealed that HDFC’s performance improved by 18.2% post AI adoption (p= 0.012), with capital adequacy ratio improved by 12.4%. Conversely, SBI showed no significant performance improvement (p > 0.05).

Keywords

Artificial Intelligence (AI), CAMEL, Financial performance, HDFC, SBI

1. Anastasi, S., Madonna, M., & Monica, L. (2021). Implications of embedded artificial intelligence—Machine learning on safety of machinery. Procedia Computer Science, 180, 338–343. Retrieved from https://doi.org/10.1016/j.procs.2021.01.171
2. Baral, K. J. (2007). Health check-up of commercial banks in the framework of CAMEL: A case study of joint venture banks in Nepal. Journal of Nepalese Business Studies, 2(1), 41–55. Retrieved from https://doi.org/10.3126/jnbs.v2i1.55
3. Bavandlapalli, A. (2023). Impact of artificial intelligence on indian banking sector-A case study of select banks in Hyderabad. Journal of Emerging Technologies and Innovative Research, 10(9), b741-b754.
4. Consultants, M. (2022). Benefits of artificial intelligence in the banking sector. Kuala Lumpur, Malaysia: Millinium Consultants. Retrieved from https://www.millenniumci.com/benefits-of-artificial-intelligence-in-the-banking-sector
5. Echekoba, F. N., Egbunike, C. F., & Ezu, G. K. (2014). Determinants of bank profitability in Nigeria: Using Camel rating model (2001–2010). IOSR Journal of Business and Management, 16(9), 44–50.
6. El-Gohary, H., Thayaseelan, A., Babatunde, S., & El-Gohary, S. (2021). An exploratory study on the effect of artificial intelligence-enabled technology on customer experiences in the banking sector. Journal of Technological Advancements, 1(1), 1–17. Retrieved from https://doi.org/10.4018/JTA.20210101.oa1
7. Finkenwirth, K. (2021). The impact of artificial intelligence on financial performance in the german financial service industry: A content analysis. Retrieved from https://run.unl.pt/ bitstream/10362/122610/1/2020-21_fall_41614_katharina-finkenwirth.pdf
8. Gupta, D. M., Garg, N., Jain, D. N., Saini, D. P., Roy, D. S., & Sati, D. M. (2024). Analysis of financial performance pre and post use of artificial intelligence applications via CAMELS lens: With special reference to HDFC bank. International Journal of Intelligent Systems and Applications in Engineering, 12(5s), 324-337
9. Ismail, M. J., & Hassan, A. (2021). Mid-year performance review of the banking sector (H1CY21). Financial Stability Department State Bank of Pakistan. Retrieved from https://www.sbp.org.pk/publications/HPR/H1CY21.pdf
10. Kok, J. N., Boers, E. J. W., Kosters, W. A., Van der Putten, P., & Poel, M. (2009). Artificial intelligence: Definition, trends, techniques and cases. Artificial Intelligence. Retrieved from https://www.eolss.net/sample-chapters/c15/e6-44.pdf
11. Mor, S., & Gupta, G. (2021). Artificial intelligence and technical efficiency: The case of Indian commercial banks. Strategic Change, 30(3), 235–245.
12. Noreen, U., Shafique, A., Ahmed, Z., & Ashfaq, M. (2023). Banking 4.0: Artificial Intelligence (AI) in banking industry & consumer’s perspective. Sustainability, 15(4), 3682. Retrieved from https://doi.org/10.3390/su15043682
13. Pal, S., & Singh, D. (2019). Chatbots and virtual assistant in Indian banks. Industrija, 47(4), 75–101. Retrieved from https://doi.org/10.5937/industrija47-24578
14. Rahman, Md. Z., & Islam, Md. S. (2017). Use of CAMEL rating framework: A comparative performance evaluation of selected bangladeshi private commercial banks. International Journal of Economics and Finance, 10(1), 120.
15. Schueffel, P. (2016). Taming the beast: A scientific definition of fintech. Journal of Innovation Management, 4(4), 32–54.
16. Shambira, L. (2020). Exploring the adoption of artificial intelligence in the Zimbabwe banking sector. European Journal of Social Sciences Studies, 5(6). Retrieved from https://doi.org/10.46827/ejsss.v5i6.942
17. Shetty, S. K., Spulbar, C., Birau, R., & Filip, R. D. (2022). Impact of artificial intelligence in banking sector with reference to private banks in India. Physics AUC, 32, 59–75.
18. Shiyyab, F. S., Alzoubi, A. B., Obidat, Q. M., & Alshurafat, H. (2023). The impact of artificial intelligence disclosure on financial performance. International Journal of Financial Studies, 11(3), 115.