Conceptualizing the Use of Artificial Intelligence in Customer Relationship Management and Quality of Services

In this chapter, the authors have conceptualized a hypothetical comprehensive model of AI, CRM, and quality of services by banks given the underlying pull and push factors that determine the extent of AI adoption by the banks. This chapter shall also serve as a primer to demonstrate the effects of use of artificial intelligence in the Indian banks and is also aimed to encapsulate the restraining and facilitating forces that drive adoption of AI. This chapter examines the blooming development of artificial intelligence and its significance in the operational efficiency in terms of management of issues related to customers while accessing different products and services offered by banks. In other words, the use of artificial intelligence technologies can dramatically improve banks' ability to achieve four key outcomes: higher profits, at-scale personalization, rapid innovation cycles, strategic customer relationship management (CRM), and distinctive omni-channel experiences. The role of artificial intelligence (AI) is significant in the banking industry for operational efficiency.

Designing Sustainable Banking Services: A Study of Indian Banks

Since the genesis of 21st century, sustainable development has been one of the key growth concerns for many developing countries. Designing services have taken a new shape with implications of sustainability being the heart of many significant developments in the financial industry in India. Considering the requirements of the regulatory framework and policy makers, banks are encouraged towards adopting a more pro-active and sensible approach towards designing their product services. These are in view of better serving their customers and cater for future developments. The purpose of their paper is to enquiry into the basis of sustainable service design aspect of banks in the Indian context despite its undisputed value for financial organisations attempting to comply with sustainability framework and policy makers to develop a sustainable development culture. The research design is exploratory in nature, which comprises extensive literature review coupled with indepth qualitative data collection from selected industry practitioners. The literature reviews clearly indicates the significance, value and power of sustainable service design. Based on results of the literature review and collected data, managerial extrapolations have been devised. To our knowledge, there has been no evident effort to investigate this research in the Indian Service banking industry regardless of the richness and value it holds.

Measuring the performance of the Indian banking industry: data envelopment window analysis approach

PurposeThis study aims to empirically evaluate the performance of commercial banks operating in India.Design/methodology/approachThe efficiency of the commercial banks is evaluated using the data envelopment analysis (DEA) approach. We measure the technical, pure technical and scale efficiency of the sampled conventional banks using the input-oriented model. We employed an extended DEA window analysis approach based on a panel sample of 47 banks in the Indian scenario. The period of study is from 2009 to 2018.FindingsThe results obtained from CRS and VRS measures envisage that Indian banks have failed to manage their inputs efficiently and convert them into outputs. It implies that Indian banks do not operate at an optimum level. Moreover, the results show that public banks exhibit superior efficiency scores followed by private and foreign banks. Apart from the aggregate sector level, we also investigate the performance of Indian banks at the individual level for in-depth analysis. The individual bank-level analysis reports that the public sector banks (PSBs) are the most efficient followed by foreign banks, whereas, the least efficient are the private banks.Research limitations/implicationsThe findings of our study have implications for government, financial institutions and policymakers to access the verve and flexibility of the Indian banking system. The government should consider restructuring inefficient banks to enhance overall performance. This can be considered by improvement in managerial efficiency, efficient allocation of scarce resources and appropriate scale of operation. However, the findings of the study should be interpreted in light of the period of study for the banks being operational (as we filter out banks that ceased to exist) in India and empirical methods employed. The results may vary if alternative measures are used.Originality/valueThe present paper investigates the efficiency of the Indian banking sector employing the Data Envelopment Window Analysis (DEWA) technique. To the best of our knowledge, the present study is perhaps the first one to employ the DEWA measure on the Indian banking industry to gauge their performance over time.

Do corporate governance practices restrain earnings management in banking industry? Lessons from India

Purpose This study aims to investigate the role of corporate governance practices in restraining earnings management in Indian commercial banks. Design/methodology/approach Estimation of earnings management is based on discretionary loan loss provision and discretionary realised security gains and losses using Beatty et al. (2002) model. The effect of corporate governance on earnings management is examined by performing two-way least square dummy variable regression. Data for a period of five years (2016–2020) is collected from the Centre for Monitoring Indian Economy ProwessIQ database, Reserve Bank of India website, annual report of banks, National Stock Exchange and bank’s website. Findings Regression results exhibit that number of board committees, size and independence of audit committee and joint audit are significantly effective in curbing earnings management. Other board-related variables (size, independence, meetings and diligence) and audit committee variables (meetings and diligence) are not effective in restraining earnings management in Indian banks. Practical implications The findings may prove to be helpful to regulators, board of directors and investors. It shows the weak area of corporate governance in India that is lack of autonomy to independent directors, which needs regulators attention and it also suggests that the number of independent auditors should be adequate for audit purposes. The board of directors must ensure the formulation of an adequate number of committees, which perform their own super specialised functions. This study brings an alarm to investors not to rely on reported earnings alone as they may be manipulated. Originality/value This paper substantiates the scant literature on the role of corporate governance practices in restraining earnings management in banks of emerging markets and to the best of the authors’ knowledge impact of joint audits on earnings management is previously unexplored in Indian banks, which are examined in this study.

Critical Perspectives to Non-performing Assets of Indian Banks, Shrinking Balance Sheet, Challenges and Way Ahead

Indian banking sector is facing the problem of rising bad loans as gross non-performing assets (GNPA) of Indian banks is on continuous rise. The present study is an attempt to analyse rising bad loans scenario of Indian banks, various factors that contributes to non-performing assets (NPA), along with the present state of Indian banks. This study found that poor recovery measures, lack of proper credit and risk management system at bank level, wilful default by borrowers, lack of stringent regulation, poor level of corporate governance and misuse of funds by borrowers are the key factors behind the rising level of bad loans of Indian banks. It was found that public sector banks (PSB) are suffering the most from rising level of NPA, high rate of NPA of banks have adverse impact on banks’ balance sheets, their assets quality, increased provisioning coverage ratio of banks and low return on assets. Although various concerned stakeholders have taken numerous measures to curb the situation, such as recapitalization of PSB, construction of assets reconstruction companies (ARC), Debt Recovery Tribunals for speedy recovery of bad loans and enactment of insolvency and bankruptcy code (IBC),still there is much more to do, and have a huge scope to bring reforms in banking sector, especially in PSB of India.

Determinants of cross selling through mobile apps in Indian Banks – A Factor Analysis Approach

With the release of world economic forums report on “New physics of financial services”, the financial ecosystem of India will adapt to digital transformation and artificial intelligence. This will change the competitive dynamics and operating models of Indian Banking Sector creating opportunities to procure and secure customers. The steadiest path to address the challenge is Cross selling. From reduced customer acquisition cost to increase in the wallet share, the economics and financials of cross selling are very compelling and hence have become the strategic priority for Indian banking sector. Banks are placing greater emphasis on providing improved services to their clients, upgrading their expertise to augment customer’s overall experience thereby earning competitive edge. The banking complexity that spans multiple lines of products, diverse serviceable areas and distinct technologies and business processes must be coordinated using mobile banking apps to deliver effective cross-sell programs which the present study proposes.