Authors: Dr. Sadaf Khan Associate Professor, Kajal Yadav Assistant Professor, Smita Pandey
Abstract: Artificial Intelligence (AI) is transforming the banking industry by improving the speed, accuracy, and efficiency of financial services. One of the most significant areas of transformation is the loan disbursement process, where AI helps automate customer verification, document processing, credit assessment, fraud detection, and decision-making. This research study examines the role of Artificial Intelligence in enhancing the loan disbursement process in banks and its impact on operational efficiency and customer satisfaction. The study aims to understand how AI technologies are integrated into various stages of loan processing, compare traditional and AI-based loan disbursement methods, and identify the benefits and challenges associated with AI adoption in the banking sector. The research is based on secondary data collected from books, research articles, banking reports, journals, and official publications related to AI and digital banking. The findings indicate that AI significantly reduces loan processing time, minimizes human errors, improves credit risk assessment, enhances fraud detection, and provides a better customer experience. However, challenges such as data privacy, cybersecurity risks, implementation costs, regulatory compliance, and the need for skilled professionals remain important considerations for banks. The study concludes that Artificial Intelligence has become a key driver of digital transformation in the banking industry. Banks that effectively implement AI in their loan disbursement processes can achieve greater operational efficiency, faster decision-making, improved risk management, and higher customer satisfaction. The research also suggests that continuous investment in AI technologies, employee training, and robust regulatory frameworks will support the sustainable growth of AI-enabled banking services.
