Artificial intelligence in financial risk management: A critical comparison of approaches and innovations – Part 1

Jörg Orgeldinger
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Jörg Orgeldinger: Philipp Reisstr, Germany

Journal of AI, Robotics & Workplace Automation, 2025, vol. 3, issue 4, 293-320

Abstract: Artificial intelligence (AI) is revolutionising financial risk management by providing innovative tools to address diverse challenges. In two papers in the series ‘Machine Finance’ the author critically examines the integration of AI technologies into the financial sector, emphasising its applications in managing risks such as credit, market, operational and compliance. This highlights the transformative potential of AI-driven models and analytics, which offer enhanced precision, real-time monitoring and robust predictive capabilities. Additionally, this study explores the ethical and regulatory challenges associated with AI adoption, particularly within frameworks such as the European Union (EU) Artificial Intelligence Act (AI Act). By comparing traditional risk management methods with AI-enabled approaches, this paper aims to provide practical insights into the future of financial stability and resilience through advanced AI-driven strategies. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.

Keywords: artificial intelligence; AI; financial risk management; credit risk; EU Artificial Intelligence Act; AI Act; predictive analytics (search for similar items in EconPapers)
JEL-codes: G2 M15 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aza:airwa0:y:2025:v:3:i:4:p:293-320

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