University:
McMaster University
Course:
COMMERCE 2FB3 | Managerial Finance
Academic year:

2024
Views:

370

Pages:

2
Author:

Sabrina S.

Artificial Intelligence and the Future of Finance 1. Fraud Detection: Machine learning studies transactions and their sequences in order to avoid realization of fraudulent behaviors. 2. Algorithmic Trading: AI based models leading in decision making in high-speed trading relying on analysis of market data. 3. Risk Management: This is facilitated through AI that analyses large volumes of financial data in the evaluation of risks. 4. Customer Service: AI chatbots and virtual assistants are also used to give round the clock support, thus enhancing customer relations. 5. Personalized Banking: AI applies client needs and tendencies to personal finance for recommending suitable products and services. AI in finance is advantageous to the progress of the finance industry in the following ways: ● More efficiency and shorter times of processing the information. ● Betterment of chances in the profit projection and decision making. ● This element would positively impact the business by relieving employees from various activities that can be automated, therefore reducing costs. ● Beneficial impact on the image of the company, and therefore, an increase in customer satisfaction and their loyalty. This is because adherence to the various rules and regulations of a country that are either prescribed by international organizations or locally will improve. Challenges and Considerations ● ● ● ● ● Data privacy and security concerns. High initial investment costs for AI implementation. Need for skilled professionals to manage AI systems. Risk of algorithmic bias and its impact on decision-making. Regulatory and ethical considerations in AI deployment. Future Trends ● ● ● Integration of AI with blockchain technology for enhanced security. Expansion of AI-driven robo-advisors for personal finance management. Increased use of AI in regulatory technology (RegTech) for compliance. ● ● Development of more sophisticated AI models for better risk assessment. Growth of AI in financial inclusion initiatives, reaching underserved populations.