The potential of artificial intelligence in finance

Abstract

The world of finance is changing, with digitisation entering all areas of our lives, including finance. It is called fintech, or financial technology, which is now at the stage where we can start talking about the financial applications of artificial intelligence. Financial digitisation is wide-ranging, from core processes, through back- and front-office applications, all the way to the customer. We channel a lot of data into bigdata. The amount of data stored here on a daily basis can no longer be manually processed. This is where solutions such as automation, machine learning and ultimately artificial intelligence come in. In this paper, I will introduce the concept of fintech and its relation to the financial applications of artificial intelligence.

Promoting sustainability in finance with AI: A review of current practices and future potential

“…This transformation is underpinned by the rapid advancement and application of AI technologies, which have become a cornerstone of modern financial services, reshaping the landscape of the industry. Bagó (2023) introduces the concept of fintech, highlighting the significant role AI plays in the financial applications of this technology. They describe AI's potential to enhance financial services by improving decision-making processes, personalizing customer experiences, and increasing operational efficiency.…”

“…These barriers, ranging from ethical and regulatory hurdles to technological and operational considerations, necessitate a multifaceted approach to ensure the responsible and effective use of AI in enhancing sustainable financial practices. Ethical considerations, as highlighted by the exploration of AI's role in modern finance, underscore the paramount importance of transparency, fairness, and accountability in AI-driven financial decisions (Bagó, 2023;Weber, Carl, and Hinz, 2023). The potential for bias in AI algorithms and the implications for privacy and data security represent significant ethical challenges that must be addressed to build trust and confidence among consumers and regulators alike.…”

“…For financial institutions, the practical implications of integrating AI into sustainable finance are manifold. The enhanced capacity for ESG data analysis and risk management afforded by AI technologies enables these institutions to align their operations more closely with sustainability goals, as highlighted in the discussions on AI's role in modern finance (Bagó, 2023;Weber, Carl, & Hinz, 2023). However, this integration also presents challenges, particularly in navigating the ethical and regulatory landscapes that accompany AI deployment.…”