Opportunities and Challenges of AI/ML in Finance

Abstract

The financial sector's rapid adoption of artificial intelligence (AI) and machine learning (ML) is examined in this chapter. It highlights the benefits of these technologies in terms of financial depth and efficiency, while also raising concerns about their potential to widen the digital divide between rich and developing nations. The chapter contributes to the topic of the impact of this technology by distilling and categorizing the distinct threats it may offer to the integrity and stability of the financial system, as well as policy issues & viable regulatory approaches. Because of the dynamic nature of this technology and its application in finance, its strengths and drawbacks remain unknown. In light of the possibility of unforeseen hazards, nations will need to strengthen prudential oversight.