Comparative Analysis between AI-Driven Banking Systems and Traditional Core Banking

This paper examines the comparative dynamics of AI-driven and traditional banking systems, highlighting their respective strengths, limitations, and the path toward integration. AI-powered banking excels in operational efficiency, real-time fraud detection, and personalized customer engagement, yet faces challenges of bias, cybersecurity, and explainability. Traditional systems maintain deep-rooted trust, human oversight, and regulatory compliance but struggle with inefficiencies and slower adaptability. Drawing from BIS and RBI perspectives, the study advocates a hybrid model where AI enhances scale and speed, while human judgment ensures ethical governance. Strategic alignment, infrastructure development, and talent reskilling emerge as pivotal for inclusive, secure, and sustainable banking.