Evolving Regulatory and Supervisory Framework for Corporate Sustainability in Banking with the Mediating Role of TQM in the Age of AI

Abstract

Purpose: The growing demand for sustainable banking practices has heralded a shift in regulatory and supervisory paradigms. Artificial Intelligence (AI) is raising new possibilities and challenges for financial institutions when it comes to balancing sustainability objectives at a corporate level with regulatory compliance and operational effectiveness. TQM is a completive organizer for coping with this transition. This study aims to explore the evolution in legislative and supervisory frameworks for corporate sustainability management in the banking industry. It also explores the mediating role of TQM in integrating sustainability with AI-based transformation, underlining an all-encompassing structure for future banking governance. Methodology: A Systematic Literature Review (SLR) was conducted using Scopus, Web of Science and ScienceDirect databases by focusing on papers from 2010 to 2025. The literature review focused on the peer-reviewed, scholarly writings on regulatory innovation, corporate sustainability, AI implementation, and TQM in banking. A diagrammatic model was developed in order to represent interactions according to the synthesis of themes. Results: Evidence points to a coalescence of sustainability and regulatory pressures, accelerated by AI implementation. TQM practices are found to significantly help transfer of technological innovation into sustainability compliance. Outcome/Value: The proposed framework provides a comprehensive perspective to support policy makers, regulators, and banking institutions in shaping robust, sustainable, and AI-enabling governance models in the AI era. Type of Paper: Conceptual Research.