Redefining Finance: The Influence of Artificial Intelligence (AI) and Machine Learning (ML)

TL;DR

This paper discusses how AI and ML are transforming finance by enabling data-driven decisions, automation, and personalized services, while also highlighting ethical and regulatory challenges faced by financial institutions.

Contribution

It provides an overview of AI and ML applications in finance, emphasizing their impact on operational efficiency, customer experience, and risk management, along with governance considerations.

Findings

AI and ML are revolutionizing retail banking, wealth management, and payments.

Financial institutions are adopting AI/ML for fraud detection and customer onboarding.

Ethical and regulatory challenges are critical in AI/ML adoption in finance.

Abstract

With rapid transformation of technologies, the fusion of Artificial Intelligence (AI) and Machine Learning (ML) in finance is disrupting the entire ecosystem and operations which were followed for decades. The current landscape is where decisions are increasingly data-driven by financial institutions with an appetite for automation while mitigating risks. The segments of financial institutions which are getting heavily influenced are retail banking, wealth management, corporate banking & payment ecosystem. The solution ranges from onboarding the customers all the way fraud detection & prevention to enhancing the customer services. Financial Institutes are leap frogging with integration of Artificial Intelligence and Machine Learning in mainstream applications and enhancing operational efficiency through advanced predictive analytics, extending personalized customer experiences, and automation to minimize risk with fraud detection techniques. However, with Adoption of AI & ML, it is imperative that the financial institute also needs to address ethical and regulatory challenges, by putting in place robust governance frameworks and responsible AI practices.