Strategic Governance, Risk, Compliance, And Sustainability (GRCS) in the Adoption of Artificial Intelligence for Digital Banking Transformation

Abstract

This study examines the role of Strategic Governance, Risk, Compliance, and Sustainability (GRCS) in supporting the adoption of Artificial Intelligence (AI) in digital banking transformation. The rapid advancement of AI technology has significantly reshaped the banking sector by improving operational efficiency, enhancing customer services, and optimizing data-driven decision-making processes. However, the implementation of AI also introduces new challenges related to governance structures, technological risks, regulatory compliance, and the long-term sustainability of digital banking systems. This research employs a qualitative approach through a literature review to explore how GRCS integration serves as a strategic framework for managing both risks and opportunities arising from AI adoption in the banking industry. The findings indicate that strong governance ensures transparency and accountability in AI utilization, risk management mitigates threats such as algorithmic bias and data security issues, compliance ensures alignment with digital banking regulations, and sustainability supports the responsible and continuous use of AI technologies. The study concludes that successful digital banking transformation depends not only on advanced AI technologies but also on the readiness of institutions to implement an integrated GRCS framework. Therefore, GRCS becomes a critical foundation for building a secure, adaptive, and sustainable digital banking ecosystem in the era of technological disruption.