Artificial intelligence in financial services : an analysis of the AI technology and the potential applications, implications, and risks it may propagate in financial services

Abstract

It is hard to deny the fact that artificial intelligence and robotization have been the centre of research for the last decades. Moreover, during the past few years it has really boomed and is now widely utilized in many companies through a wide range of sectors. Most of the time artificial intelligence has been referred to as some kind of automatization of processes within the industrial sector, but we have started to see a greater way of using technology for the better, particularly in financial services. The financial industry has been somewhat slower in its approach of implementing artificial intelligence and accepting its powers due to several reasons. Reasons such as uncertainty, regulations, need for better cyber security, shortfalls in technology, and disruption of standard already profitable procedures are all apprehensions the industry have faced previously. Firms operating in financial services have started to see the benefits artificial intelligence brings to the company, and never before have something like this been talked more about. That is maybe one of the reasons why this transformation is called the fourth industrial revolution. It is highly disruptive, in both a good and bad way. Solutions become much more efficient, precise, and cost effective. However, with great power, comes great responsibility. Given that the financial sector is undergoing significant change at a rapid pace, precautions and security have never been more important to companies. We humans have yet to discover the many pros and cons this technology brings. Although artificial intelligence was originally introduced to us in the 1950s, it has achieved new eminence lately as computational power has risen, and the amount of accessible data has become immense.