The introduction of artificial intelligence (AI) in digital marketing is transforming India’s banking industry through customer personalization, service automation, and data-based decision making. However, the extent to which AI-driven digital marketing promotes customer trust remains understudied, particularly across public and private sector banks in India. This paper attempts to fill this research gap by conducting an analysis based on responses from 600 customers in the banking sector of Kerala. These respondents belong to two different sets of banks – one set comprises 300 public sector bank customers, while the other set consists of 300 private sector bank customers. Based on descriptive statistics, more acceptance of AI was observed among customers of private banks, as reflected in their mean scores for AI use (M = 3.8 vs. 3.2) and digital customer experience (M = 4.0 vs. 3.6). In comparison, there is a slight advantage for public banks regarding perceived safety (mean = 3.8 against 3.7). Results from correlations show a positive relationship between customer trust and customer experience in the digital environment (r = 0.70), security (r = 0.65), and the usefulness of AI technology (r = 0.60). The regression model explains 62% of the total variance in customer trust (R² = 0.62), with the digital customer experience being the strongest predictor (β = 0.29). An independent samples t-test shows significantly higher levels of customer trust in private banks (t = –4.44, p < 0.001). Findings show that digital service quality, AI transparency, usefulness, and security together contribute to customer trust in AI services in the banking industry.
Akhil Sebastian (Sat,) studied this question.
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