Affiliation:
1. Krakow University of Economics, Poland
2. Utkal University, India
3. Indian Institute of Management, Lucknow, India
Abstract
The global financial crisis of 2008 exposed many vulnerabilities of the financial systems and how these system failures took a massive toll on governments, institutions, and societies worldwide. Given the critical link between the financial and the rest of the economic sectors, financial risk management is critical to avoid similar kinds of catastrophic events in the future. Playing the crucial financial intermediary role in society forces firms to evolve and manage financial risks daily. With the emergence of big data, computational frameworks, and AI algorithms, finance sector risk management is rapidly adopting them across different use cases. AI applications designed for financial risk management aim to streamline processes to improve accuracy, efficiency, and productivity while reducing costs for companies to remain competitive. These emerging AI technologies provide a fresh perspective on how risk should be viewed, assessed, and managed. This chapter has summarized and shared various examples of how AI is used for financial risk management.