The Impact of Artificial Intelligence-Powered Customer Service in Digital Banking: A Case Study of Jaiz Bank, Sokoto State
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1.1 Background of the Study
The rapid evolution of digital banking has revolutionized the financial services sector, particularly in enhancing customer experience and operational efficiency. As more banking activities move online, customers expect faster, personalized, and more responsive services. Artificial Intelligence (AI)-powered customer service tools, including chatbots, virtual assistants, and automated response systems, have emerged as key enablers in addressing these demands. AI systems can handle high volumes of customer interactions, providing timely solutions, reducing human error, and enhancing customer satisfaction. Research (Alabi & Akinlolu, 2024; Lee et al., 2025) indicates that AI-powered customer service not only improves response times but also offers 24/7 accessibility, making banking more convenient for users.
Jaiz Bank, located in Sokoto State, has been at the forefront of adopting AI-driven customer service tools to enhance its digital banking offerings. The bank's move towards AI adoption comes in response to an increasing demand for seamless and efficient banking experiences, especially from its diverse customer base that includes both urban and rural populations. However, the integration of AI in customer service also raises challenges related to customer trust, data privacy concerns, and system adaptability. This study focuses on assessing the impact of AI-powered customer service in digital banking at Jaiz Bank, Sokoto State, examining its effects on customer satisfaction, operational efficiency, and the overall banking experience.
1.2 Statement of the Problem
Despite the increasing reliance on digital banking, many Nigerian banks still face challenges in providing efficient, timely, and personalized customer service. Traditional customer service methods, such as phone calls and in-person support, are time-consuming and may not adequately address the growing expectations of customers. Jaiz Bank has implemented AI-powered solutions, such as chatbots and virtual assistants, to address these gaps. However, the extent to which these AI tools enhance the customer experience, increase operational efficiency, and drive customer loyalty remains unclear. This study seeks to evaluate the effectiveness of AI-driven customer service at Jaiz Bank and assess the challenges faced in integrating these technologies.
1.3 Objectives of the Study
1. To assess the impact of AI-powered customer service tools on customer satisfaction at Jaiz Bank, Sokoto State.
2. To examine the effect of AI tools on the operational efficiency of Jaiz Bank's customer service functions.
3. To identify challenges and opportunities in the integration of AI-powered customer service systems in digital banking.
1.4 Research Questions
1. How does AI-powered customer service impact customer satisfaction at Jaiz Bank, Sokoto State?
2. What effect do AI-powered tools have on the operational efficiency of Jaiz Bank’s customer service functions?
3. What challenges and opportunities exist in the integration of AI customer service systems at Jaiz Bank?
1.5 Research Hypothesis
1. AI-powered customer service significantly improves customer satisfaction at Jaiz Bank, Sokoto State.
2. The integration of AI tools enhances the operational efficiency of Jaiz Bank’s customer service department.
3. Challenges such as data privacy concerns and system limitations hinder the full potential of AI-powered customer service systems.
1.6 Significance of the Study
This study provides valuable insights into the role of AI in transforming customer service within the digital banking sector. For Jaiz Bank, the findings will offer an evaluation of the current AI tools in use and their impact on customer satisfaction, helping the bank refine its service offerings. Additionally, the study will highlight operational benefits, such as improved response times and cost reductions, which can lead to better resource allocation. Policymakers and other banks in Nigeria can use the study's findings to understand the challenges and opportunities of adopting AI in customer service, potentially guiding national strategies for digital banking growth.
1.7 Scope and Limitations of the Study
The study focuses on the implementation and impact of AI-powered customer service tools at Jaiz Bank in Sokoto State. It evaluates how these tools influence customer satisfaction, service efficiency, and operational processes. Limitations include challenges in obtaining detailed internal data on operational performance, the subjective nature of customer satisfaction surveys, and the potential influence of external factors such as market competition and regulatory changes. Additionally, the study may not fully capture the long-term effects of AI implementation, as these technologies are still evolving.
1.8 Operational Definition of Terms
1. AI-Powered Customer Service: The use of artificial intelligence technologies, such as chatbots and virtual assistants, to handle and automate customer service interactions.
2. Digital Banking: The use of internet-based platforms to conduct financial transactions and manage banking services without the need for physical branches.
3. Customer Satisfaction: The level of contentment and approval customers have toward a company’s services, measured by factors such as responsiveness, quality, and reliability.
4. Operational Efficiency: The ability of an organization to deliver services at the lowest possible cost while maintaining high-quality standards.
5. Virtual Assistants: AI-driven tools designed to interact with customers, answering questions, providing information, and facilitating services through text or voice-based interfaces.
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