ARTIFICIAL INTELLIGENCE FOR SUSTAINABLE DEVELOPMENT IN THE BANKING SECTOR
Keywords:
Artificial Intelligence, Sustainable Banking, ESG, Green Finance, Financial Inclusion, Operational Sustainability, Risk Management, Sustainable Development Goals (SDGs).,,Abstract
Artificial Intelligence (AI) is emerging as a key enabler of sustainable development in the
banking sector by integrating environmental, social, and governance (ESG) principles into
lending, investing, and operations. This paper examines how AI driven tools—such as machine
learning, natural language processing, and predictive analytics—support green finance, ESG
based risk assessment, financial inclusion, and operational energy efficiency. A mixed method
approach is used, combining literature review and case study analysis of selected Indian and
global banks. The study finds that AI improves the accuracy of ESG scoring, enables targeted
green lending, and reduces carbon intensity of banking operations. However, concerns around
data quality, algorithmic bias, and regulatory gaps remain. The paper concludes with policy
and managerial suggestions for responsible AI adoption aligned to sustainable development
goals (SDGs).
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