THE IMPACT OF ARTIFICIAL INTELLIGENCE DISCLOSURE ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS LISTED ON THE PALESTINE AND AMMAN STOCK EXCHANGE FOR THE PERIOD FROM 2015 TO 2023
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Date
2025-08-07
Authors
Ameer Abbas Dwikat
Journal Title
Journal ISSN
Volume Title
Publisher
جامعة النجاح الوطنية
Abstract
This research examines AI impact on the financial performance of commercial banks listed in Palestine and Amman stock exchange from 2015 to 2023. The main objective of this research is to determine whether commercial banks financial performance can be improved by implementing AI technologies in emerging markets that characterized by differing economic and technological environments. Financial performance assessment in this study relies on four measurement indicators which include Return on Assets (ROA), Return on Equity (ROE), Net Interest Margin (NIM) and Market Share (MS), AI disclosure Assessment depend on whether commercial banks included details about their AI-related business practices or technologies in their financial reports or not, while corporate governance represented by 7 variables which are (bank size ,Ownership concentration, board size, Long term debt ratio, CEO duality, Gender diversity and Number of board meetings) served as controls to explore institutional factors affecting the AI–performance relationship.
This research adds to digital transformation growing body of literature regarding banking industry’s by presenting empirical evidence obtained from emerging market. This plays an essential role in helping banks reach their operational goals and boost both market position and shareholder wealth. Finally this study provide some practical recommendations for banks, regulators, and future researchers, highlighting the need for greater investment in AI technologies, improved governance frameworks, and broader comparative studies across regional and international contexts.
The study has found that artificial intelligence disclosure has a significant effect on the financial performance of commercial banks that are listed on Palestine and Amman Stock Exchanges over the period of 2015-2023. The empirical findings showed that AI disclosure is positively associated with both return on assets (ROA) and market share, which implies higher operational efficiency and market share, with moderate yet significant being the relation to both return on equity (ROE) and net interest margin (NIM). All these results were explained under six theoretical frameworks as the Resource-Based View of the Theory, Technology Acceptance Model, the Transaction Costs Model Agency Theory, the Contingency Theory, and the IS Success Model. These frameworks, combined, offered the conceptual framework to the hypothesis underlying the study and served to identify the mechanisms through which AI adoption and disclosure support profitability, efficiency, and long-run sustainability in the banking industry.
Based on these results, the study recommended Palestine and Jordan commercial banks to follow a more uniform practices in disclosing artificial intelligence applications, as it would result in greater transparency and comparability across establishments. In addition banks should also invest more in technological infrastructure, employee training, and data management infrastructure to realise the full efficiency benefits attached to the use of AI. It is also necessary to strengthen mechanisms of governance to provide the possibility to effectively control the AI initiatives as it would reinforce the aspects of accountability and reduce the risks. Lastly, it is suggested that regulators and policymakers should work on developing harmonized reporting habits of AI disclosures which would foster the decision-making of various stakeholders, enhance confidence in the market and lead to the over-all competitiveness and robustness of the banking sector.