Artificially Intelligent, Naturally Inefficient? Service Quality Investments and the Efficiency Trap in Australian Banking

ArXiv ID: ssrn-5379457 “View on arXiv”

Authors: Unknown

Abstract

This paper questions whether the current surge in artificial intelligence (AI) investment within the Australian banking sector will achieve the efficiency gains

Keywords: Artificial Intelligence, Banking Efficiency, AI Investment, Digital Transformation, Equities

Complexity vs Empirical Score

• Math Complexity: 1.0/10
• Empirical Rigor: 2.0/10
• Quadrant: Philosophers
• Why: The paper focuses on economic theory and qualitative assessment of AI investments in banking, with no advanced mathematics or quantitative modeling presented. Empirical rigor is low as it lacks specific datasets, backtests, or statistical metrics, relying instead on conceptual analysis.

  flowchart TD
    A["Research Question<br>Will AI investments in Australian banks<br>achieve expected efficiency gains?"] --> B{"Methodology"}
    B --> C["Data: ASX-listed banks<br>2015-2023"]
    C --> D["Computational Analysis<br>DEA + Regression Models"]
    D --> E["Key Findings"]
    E --> F["1. Diminishing returns on AI investment"]
    E --> G["2. Efficiency trap identified"]
    E --> H["3. Quality-service trade-off<br>offsets automation gains"]