The Transformation of Contemporary Financial System in The Digital Age of Artificial Intelligence

Abstract

This study envisages to emphasize the significance of utilizing Artificial Intelligence in the currently prevailing banking and financial businesses. This article seeks to dissipate and address the possible ventures confederated with financial institutions which avail these technologies, customers or users, and investors including the market cyclicity and comprehensive risk. It emphasizes on the role of AI applications in enhancing financial organizations’ contentious interests which further obliges or compels the collaboration and participation of policymakers and regulators. The pertinence and affirmation of Artificial Intelligence systems in precipitating corporate operations, risk management, and revenue growth is gaining propulsion worldwide. This article examines the inference of rapid use of Artificial intelligence (AI) in the financial sector. It also focuses on the benefits of such technology with respect to financial depth and coherence while accentuating the scrutiny regarding the expansion of digital divide between developed and developing countries. The research imparts to the conversation about the effect of AI by emanating and tabulating the threats it may initiate with respect to the integrity and stability to the financial depth while also looking into the policy issues and effective regulatory measures. AI and its application in the financial sector are constantly growing but the entire extent of its strengths and disadvantages remains unidentified. Despite being provided the potential for unanticipated consequences, there is still a need to consolidate prudential monitoring. While attempting to highlight the consequences regarding implementation of AI and to determine the benefits and risks which accompanies the use of AI, this research work aims to arrive to a conclusion with proffering and recommendations for the regulatory bodies and the policymakers in the guise of responses and suggestions to pursue stimulating innovation of AI in finance to safeguard financial investors and consumers.