The deposits money banks (DMBs) in Nigeria that invested artificial intelligence (AI) were considered in this study with the objective to know the effect of AI on employee cost and other operating cost in the banking sector. The study adopted ex-post facto research design. Secondary data were gathered between 2012 and 2022 from the respective financial statements of the DMBs and analyzed using panel regression model. It was gathered that the adoption of AI has negative effects on employee cost while it has positive effects on operating expenses of DMBs in Nigeria. The study concluded that the adoption of AI by DMBs in Nigeria will improve their corporate operating activities which will translate to improve financial performance. Government should regulate the activities of DMBs to forestall any form of laying-off.
Keywords: Artificial Intelligence, Financial System, Operating Cost, employee cost
