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Stream/Area:
-
Subject:
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Paper ID:
IJSREM67822
Volume:
10 |
10 |
Oct 2026
Pages:
1-17
Publication Frequency:
Monthly (12 issues per year)
License:International Journal of Scientific Research in Engineering and Management follows the Creative Commons Attribution 4.0 (CC BY 4.0) License, allowing free use and distribution with proper attribution.
Bachelor of Business Administration
Koneru Lakshmaiah Education Foundation (KLEF)
Bachelor of Business Administration
Koneru Lakshmaiah Education Foundation (KLEF)
With the growing adoption of artificial intelligence (AI) in the financial sector, including the use of chatbots, customised recommendations, fraud detection, and automated financial advice, it is essential to align these AI-driven tools with the specific context of India to assess their impact on customer satisfaction and loyalty.As banks increasingly turn to AI for services such as chatbots, personalised recommendations, fraud detection, and automated financial advice, it is crucial to evaluate how these tools relate to Indian customer satisfaction and loyalty. This study explores four AI-powered digital banking services and their impact on customer satisfaction and loyalty, as well as verifying whether the satisfaction serves as a mediator between AI services and loyalty. A structured questionnaire with a five-point Likert scale was used to gather primary data from 132 bank customers, which were analysed using Cronbach's alpha, test of association (chi-square), one-way ANOVA, Pearson correlation, multiple linear regression and simple linear regression and bootstrapped mediation analysis. Chi-square results show that the level of perceived AI service quality is significantly associated with satisfaction (χ² = 62.20, df = 4, p < .001, V = .49) and loyalty (χ² = 68.22, df = 4, p < .001, V = .51). ANOVA indicates that there were significant differences between bank type, age group and gender for satisfaction. The four AI services together accounted for 47.2% of variance in satisfaction (R² = .472, p < .001), with AI financial advice (β = .59) and AI chatbots (β = .32) as significant predictors, while personalisation and fraud detection did not prove to be significant predictors after controlling for the other AI services. Satisfaction is a strong predictor of loyalty (β = .66, R² = .438), and serves as a partial mediator between AI and loyalty (indirect effect = .223, 95% bootstrap CI [.098, .499] accounting for approximately 41% of the total effect). The results indicate that banks should focus on incorporating conversational and advisory AI capabilities and actively working on satisfaction. Data quality issues such as student sampling and high percentage of similar response patterns are discussed.
KEYWORDS
This study explored the links between AI-powered digital banking and satisfaction and loyalty. Customer satisfaction is partially mediated by the effect of the AI services on loyalty, with AI financial advice and AI chatbots being the most influential services for satisfaction and AI chatbots being the most influential service for loyalty; Customers who feel positive about the AI services are more satisfied and more loyal. The takeaway for banks is to focus on using conversational and advisory AI tools that consumers are using and can directly assess themselves, add more personalisation, and listen to customer satisfaction as the metric for how AI investments translate to loyalty. Because of limitations of the sample and data quality, the findings should be interpreted as preliminary evidence in need of further validation with a larger and more representative sample.
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Publication Date
10/12/2026
Peer Review Type
Double-Blind Peer Review
Review Rounds: 2
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