Artificial intelligence–driven open innovation for sustainable service innovation leading to ethical and organizational pathways to enhanced business performance management

The current research examined how Artificial Intelligence (AI) capabilities positively influence the performance and development of sustainable service innovation (SSI) within banks of Saudi Arabia. Research explored both the internal and external knowledge sources to identify potential mediators between AI capacity and developing SSI. This research utilized quantitative approach and data collection was preferred by employees of banks. Structural equation modeling was utilized to identify key findings that indicated positive impacts of AI capacity on SSI development directly and indirectly with the use of internal knowledge, however, did not validate external knowledge as a mediator. SSI development was determined to have a positive impact on financial performance for financial institutions resulting in an opportunity to demonstrate ethical and customer focused business value for innovative development. Theoretical contributions related to the resource-based view (RBV) and open innovation models were achieved through illustrations of the relationships between AI capacity, knowledge processes, and practices with the organization. Practically this study provided insight in relation to how to implement AI technology as a structured process in the development of sustainable and competitive high performance financial services.