Leveraging Artificial Intelligence for Enhanced Bank Profitability: The Role of Technological Innovation
Purpose: The main aim of this research is to find and understand better the real contribution of AI to financial performance of banks across 20 homogenerous countries. Design/Methodology/Approach: It evaluates three dimensions: the direct impact of AI innovation on performance, the mediating role of information and communication technology (ICT) development, and the moderating influence of economic growth. By relying on longitudinal panel data, the research also captures both short-term and delayed effects of AI adoption, offering insights into its dynamic implications over time. Findings: The empirical findings indicate that while AI technological innovation alone does not have a significant immediate effect on banks’ return on assets, its influence is partially transmitted through improvements in ICT infrastructure. In particular, ICT development mediates the relationship between AI innovation and financial performance, highlighting the crucial role of digital infrastructure in converting technological investments into operational and financial gains. Practical Implications: The research offers a comprehensive perspective on how AI-based innovation can enhance financial performance, support sustainable growth, and reinforce competitiveness within the banking industry. Originality/Value: This work contributes to the existing literature in several ways.