Transforming Banks into Digital Organizations: The Effects of Artificial Intelligence on Reducing Branches and Improving Financial Services

Bahrami Seif Abad, Mohammad

doi:10.22034/efp.2026.741309

Transforming Banks into Digital Organizations: The Effects of Artificial Intelligence on Reducing Branches and Improving Financial Services

نوع مقاله : مقاله پژوهشی

نویسنده

Mohammad Bahrami Seif Abad

Department of Management, Yasuj Branch, Islamic Azad University, Yasuj, Kohgiluyeh and Boyer-Ahmad, Iran.

10.22034/efp.2026.741309

چکیده

This study investigates the effects of digital banking, digital payments, and liquidity conditions on the number of physical bank branches over the period from 2004 to 2025. The research was conducted using the autoregressive distributed lag econometric method in EViews version 12. The results of the Augmented Dickey–Fuller unit root test indicated that the research variables were non-stationary at level and stationary at the first difference. Based on the Granger causality test, a unidirectional causal relationship from digital banking to digital payments and liquidity was confirmed. The results of estimating the dynamic research model indicate a negative and significant effect of the explanatory variables on the number of physical branches, such that the estimated coefficients for the digital banking index, digital payments, and liquidity were −0.319, −35.37, and −44.71, respectively. These findings demonstrate a substantial reduction in the banking system’s structural dependence on physical branches following the expansion of non-face-to-face payment instruments and the development of digital infrastructure. The downward trend in the number of branches accelerated particularly after 2013 and reached its minimum during 2017–2020. Given the projected annual growth rate of 83.31% for artificial intelligence in the financial industry and the 44.42% growth of neobanks by 2033, it is essential for banks to move toward optimizing their branch networks and enhancing virtual services by investing in emerging technologies such as big data, cloud computing, and blockchain.

چکیده تصویری

Transforming Banks into Digital Organizations: The Effects of Artificial Intelligence on Reducing Branches and Improving Financial Services

کلیدواژه‌ها

Digital Banking

Digital Payments

Number of Physical Branches

Autoregressive Distributed Lag Model

Artificial Intelligence

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