Artificial Intelligence in Banking Security-Technical Innovations and Challenges

The accelerating adoption of artificial intelligence (AI) technologies in the banking sector has introduced transformative possibilities for enhancing security frameworks against increasingly sophisticated cyber threats. This research investigates the technical innovations driven by AI, such as machine learning algorithms, biometric authentication systems, and natural language processing, and their impact on improving fraud detection, cybersecurity monitoring, and compliance automation. The paper identifies how AI systems, through real-time analysis of large-scale transaction data, can locate abnormal behavioral patterns and respond proactively to potential threats, significantly reducing human error and response time. A detailed analysis of the current literature reveals a significant research gap in integrating explainable AI, secure data governance frameworks, and scalable models suited for diverse banking environments. The outcome of this research highlights the need for a balanced approach that fosters technological innovation while addressing regulatory compliance, ethical concerns, and operational constraints, paving the way for a secure and intelligent banking infrastructure.