This study aims to explore the relationship between artificial intelligence (AI) disclosure and bank profitability, and to assess whether family ownership plays a moderating role in this relationship. It takes into account the trade-off between increased disclosure and near-term profitability pressure, as well as how family ownership reduces that effect.
The study utilizes a balanced panel data of 14 banks included in the Amman Stock Exchange (ASE) for the period 2015–2024, which provides a total of 140 bank-year observations. Ordinary least squares regressions are employed to explore the association between AI-related disclosure and bank profitability, measured by return on assets (ROA) and return on equity (ROE), and the moderating effect of family ownership. In order to mitigate the potential endogeneity concerns and evaluate the robustness of the results, two-stage least squares (2SLS) estimations are conducted.
AI-related disclosure is negatively and significantly associated with bank profitability (ROE and ROA), showing that greater disclosure does not necessarily imply positive financial outcomes. Instead, increased disclosure of AI could signal more aggressive investment, implementation, and organizational change, which can have high upfront costs in the short term before financial gains are seen. Notably, the negative relationship is weaker in family-owned banks, indicating that better monitoring, longer investment time horizon, and greater resource discipline can help mitigate the short-term financial pressures of banks going through transformation due to AI.
This study extends the emerging AI disclosure literature by documenting a potential contemporaneous profitability penalty associated with greater AI-related disclosure. To the best of the authors' knowledge, it is among the first studies to examine the adverse profitability implications of AI-related disclosure in the banking sector while simultaneously investigating family ownership as a moderating governance mechanism. It also contributes to the family-business and corporate-governance literature by identifying family ownership as a buffering condition in the AI disclosure–profitability relationship. The findings provide new evidence from an emerging-market banking context that the financial consequences of AI-related transformation depend partly on ownership structure.
