The Impact of Artificial Intelligence on Commercial Banks in Albania

Abstract

Artificial Intelligence (AI) is significantly transforming the Albanian banking sector by enhancing operational efficiency, customer experience, and security measures. This study employs a regression analysis to quantify the impact of Artificial Intelligence on the operational efficiency and financial performance of commercial banks in Albania. Using panel data from 10 major Albanian banks over a five-year period (2019–2024), we analyze the relationship between AI adoption (independent variable) and key performance indicators (dependent variables), including cost efficiency, fraud detection rate, and customer satisfaction. Results indicate a statistically significant positive relationship between AI adoption and bank performance, with AI-driven automation contributing to a 25% reduction in operational costs and a 20% increase in fraud detection accuracy. Additionally, customer satisfaction improved by an average of 18%, as AI-enabled chatbots and personalized services enhanced the banking experience. However, the model also highlights workforce displacement concerns, with a moderate negative effect on employment growth rates. The study concludes that AI implementation positively influences bank performance in Albania, but a balanced approach, including workforce training and regulatory compliance, is necessary to maximize its benefits. Future research should explore AI’s long-term impact on financial stability and customer trust in the Albanian banking sector. Despite the benefits, the implementation of AI in Albanian banks faces challenges such as limited digital infrastructure, insufficient investment, and a shortage of skilled professionals. To fully harness AI’s potential, it is recommended that banks: Invest in digital infrastructure by upgrade existing systems to support AI technologies, develop talent by offer training programs to develop AI-related skills among employees and enhance transparency by clearly communicate AI applications and data usage policies to customers to build trust.