How AI is re-shaping the financial industry: lights, shades and perspectives
Paola Papanicolaou
Chapter 11 in Artificial Intelligence and Financial Behaviour, 2023, pp 205-214 from Edward Elgar Publishing
Abstract:
While Artificial Intelligence (“AI”) is quickly spreading across all industries, the financial sector has been amongst the fastest adopters of AI algorithms. By leveraging big data, AI is fundamentally changing the operating models and competitive dynamics of financial industry by enhancing its predictive power and decision-making process. In particular, AI has the potential to reduce time and cost of service and to support the development of client-centric strategies. AI can indeed help in creating contextualized hyper-personalized strategies for clients, adopting “human-like virtual interaction” while preserving customer satisfaction, increasing clients’ protection from fraudulent activities. On the other hand, AI is exposing the financial system to unprecedent hazards and uncertainties to be tackled by regulators. AI can be subject to human biases, it can trigger new systemic risks as well as new undesired dynamics such as algorithmic collusion. At the same time, it is necessary to define the building principles of AI such as ethics, privacy, explainability, and competition. All these factors are required to be collectively considered to unlock the promise of AI to build a better financial ecosystem for all.
Keywords: Economics and Finance; Innovations and Technology (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:
Downloads: (external link)
https://www.elgaronline.com/view/edcoll/9781803923154/9781803923154.00019.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:21559_11
Ordering information: This item can be ordered from
http://www.e-elgar.com
Access Statistics for this chapter
More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().