Exploratory Study on Utilization of AI Technology Public Commercial Banks in Sri Lanka

Abstract

Introduction: This study explores the integration of AI in Sri Lanka's public banking sector, focusing on the opportunities, challenges, and strategic insights from senior professionals at People’s Bank and Bank of Ceylon. Examines how AI can improve operational efficiency, customer service, and security while identifying barriers to adoption and proposing strategies for successful implementation.

Methodology: A qualitative methodology was used in this study, involving semi-structured interviews with banking professionals to gather insights on AI's role in transforming the banking sector. The data was analyzed through thematic analysis.

Findings: The findings highlight that AI offers major opportunities for improving operational efficiency, such as through Robotic Process Automation (RPA), predictive analytics for customer behavior, and advanced security features like fraud detection. However, challenges such as limited budgets, a skills gap, inadequate technology infrastructure, and resistance to change from both employees and customers were also identified. The study stresses the importance of employee training, customer education, and strategic planning to ensure successful AI adoption.

Conclusion: This research offers valuable insights into AI adoption in developing economies, particularly for public sector banks. It provides a strategic roadmap for gradual AI integration, balancing technological progress with workforce readiness. The study highlights the transformative potential of AI while recommending a phased approach to address implementation challenges.