Author(s): Shilpa Alshi CA
Banking is the backbone for the Indian economy. The integration of Artificial Intelligence (AI) with banking automation is changing how financial institutions in India operate and plan for the future. This study examines at how Artificial Intelligence (AI) is used in Indian banks, focusing on how it affects operational efficiency and risk management. In this study, it is used a quantitative, cross-sectional research design to collect primary data from 335 employees at public and private banks in Mumbai using structured questionnaires. The study looks at how much AI is being used, how it affects process optimization and risk mitigation, and how important organisational readiness is for successful implementation. There are three hypotheses, tested with independent t-tests and Pearson correlation analysis. The results show that banks that use AI are statistically more efficient than banks that don't use AI (p < 0.001). Also, there were strong positive links between AI integration and lowering risk (r = 0.89) and between being ready for AI deployment and success (r = 0.92). The study shows how important AI is for improving banking performance and how important it is to have the right digital infrastructure, ready employees, and rules that are in line with AI. These insights show how Indian banks can use AI in a way that is advantageous for the environment, and they have real-world effects on policy frameworks and institutional changes that support digital transformation.