ARTIFICIAL INTELLIGENCE ADOPTION AND SECURITY OF DEPOSITORS’ FUND LISTED DEPOSIT MONEY BANKS IN NIGERIA

As the financial sector in Nigeria increasingly embraces artificial intelligence (AI), one of its most crucial applications lies in enhancing the security of depositor’s funds. With the rising threat of cyberattacks and fraud, AI offers powerful tools for safeguarding financial assets through advanced fraud detection, predictive analytics, and real-time monitoring. This study investigates the effect of artificial intelligence adoption and security of depositors’ fund listed deposit money banks in Nigeria with specific attention on the effect of artificial intelligence adoption on savjngs deposit, fixed deposit and demand deposit of listed deposit money banks in Nigeria. The study employed survey research design on a population 13 listed deposit money banks on the Nigeria Exchange Group as at December 31, 2024 over a period of 10 years from 2015- 2024. Secondary data were collected from the published annual reports of all 10 listed deposit money banks. Data collected were analysed using descriptive and inferential statistics. The findings revealed that artificial intelligence adoption [coef. = 0.092 (p = 0.502)] has an insignificant positive effect on savings deposits of listed Nigerian banks during the study period. Artificial intelligence adoption [coef. = –0.059 (p = 0.687)] has an insignificant negative effect on fixed deposits of listed Nigerian banks during the study period. Artificial intelligence adoption [coef. = 0.178 (p = 0.277)] has an insignificant positive effect on demand deposits of listed Nigerian banks during the study period. Across all models, leverage displayed negative but insignificant effects, confirming that bank capital structure did not significantly alter the relationship between AI adoption and deposit security in the Nigerian banking context. The study concluded that AI adoption does not have a significant effect on the security of depositors’ fund of listed deposit money banks in Nigeria. The study recommends that banks should view AI adoption as a continuous process, integrating it with governance, cyber risk management, and customer education to build depositor trust. Managers should invest in AI for savings mobilization and fraud prevention, while regulators ensure effectiveness. AI adoption should be paired with competitive interest rates and stable policies to enhance financial stability. Additionally, AI should improve transactional security and real-time fraud monitoring to boost confidence in digital transactions and strengthen liquidity.