Artificial intelligence (AI) transforming the financial sector operations
DOI:
https://doi.org/10.37497/esg.v7iesg.1624Keywords:
Artificial Intelligence, Financial Sector, Governance, Customer Experience, CybersecurityAbstract
Objective: The study aims to explore the potential of artificial intelligence (AI) in enhancing operations within the financial sector. The primary focus is on identifying functions that could be improved through the adoption of AI technologies.
Method: The research methodology involves a comprehensive review of existing literature and research on AI applications in the financial sector. The study examines various dimensions where AI can enhance financial operations and proposes a conceptual framework based on the findings.
Results: The study finds that AI significantly impacts several areas of the financial sector, including algorithmic trading, fraud detection, customer service through chatbots, cybersecurity, and accounting. AI enhances predictive analysis, improves service quality, enables rapid and automated decision-making, and provides real-time customer insights. Furthermore, AI's role in cybersecurity and fraud detection is crucial for maintaining compliance and protecting sensitive information.
Conclusions: AI transforms financial sector operations by improving efficiency, accuracy, and customer satisfaction. The adoption of AI technologies supports better governance practices, enhances the social aspect of customer interactions, and indirectly contributes to environmental sustainability through improved operational efficiency. These findings underscore the importance of integrating AI in financial operations to achieve sustainable development goals.
References
Akpan, I.J., Soopramanien, D. and Kwak, D.-H. (Austin) (2020). Cutting-edge technologies for small business and innovation in the era of COVID-19 global health pandemic. Journal of Small Business & Entrepreneurship, [online] 33(6), pp.1–11. Available at: https://www.tandfonline.com/doi/full/10.1080/08276331.2020.1799294 [Accessed 15 Mar. 2023].
AV Test. (2019). Malware. Available at: https://www.av-test.org/en/statistics/malware/
Binner, M. J., Kendall, G., & Chen, H. S. (2004). Advances in Econometrics Vol 19: Applications of Artificial Intelligence in Finance and Economics. Bingley, The UK: Emerald Group Publishing Limited. Campbell, T. D., & Cook, D. T. (1979). Quasi-Experimentation: Design & Analysis Issues for Field Settings. Boston, The US: Houghton Mifflin.
Boillet, J. (2018). How Artificial Intelligence Will Transform the Audit. EY. Available at: https://www.ey.com/en_us/assurance/how-artificial-intelligence-will-transform-theaudit
Budish, E., Cramton, P., & Shim, J. (2015). The High-Frequency Trading Arms Race: Frequent Batch Auctions as a Market Design Response. Available at: https://faculty.chicagobooth.edu/eric.budish/research/HFT-Freq
Campbell, C., Sands, S., Ferraro, C., Tsao, H.-Y. (Jody) and Mavrommatis, A. (2020). From data to action: How marketers can leverage AI. Business Horizons, 63(2), pp.1–17.
Castelli, M., Manzoni, L., & Popovic, A. (2016). An Artificial Intelligence System to Predict Quality of Service in Banking Organizations. Computational Intelligence and Neuroscience, http://dx.doi.org/10.1155/2016/9139380.
Chinner, V. (2018). Artificial Intelligence and the Future of Financial Fraud Detection. Forbes. Available at: https://www.forbes.com/sites/theyec/2018/06/04/artificialintelligence-and-the-future-of-financial-fraud-detection/#2e8ed8fb127a
Citibank. (2018). Bank of the Future: The ABCs of Digital Disruption in Finance. Available at: https://www.citigroup.com/commercialbank/insights/assets/docs/2018/The-Bankof-the-Futue/ Clerkie. (n.d). Homepage. Available at: https://clerkie.io
Clerkie. (n.d). Homepage. Available at: https://clerkie.io
Davenport, T., Guha, A., Grewal, D. and Bressgott, T. (2019). How Artificial Intelligence Will Change the Future of Marketing. Journal of the Academy of Marketing Science, [online] 48(1), pp.24–42. Available at: https://link.springer.com/article/10.1007/s11747-019-00696-0 [Accessed 15 Mar. 2023].
Dietvorst, B., Simmons, P. J., & Massey, C. (2014). Algorithm Aversion: People Erroneously Avoid Algorithms After Seeing Them. Available at: https://www.researchgate.net/publication/268449803_Algorithm_Aversion_People_Er roneously_Avoid_Algorithms_After_Seeing_Them_Err
Drydakis, N. (2022). Artificial Intelligence and Reduced SMEs’ Business Risks. A Dynamic Capabilities Analysis During the COVID-19 Pandemic. Information Systems Frontiers, 24, pp.1223–1247.
Fonseka, K., Jaharadak, A.A. and Raman, M. (2022). Impact of E-commerce adoption on business performance of SMEs in Sri Lanka; moderating role of artificial intelligence. International Journal of Social Economics, 49(10), pp.1518–1531.
Forbes. (2018). 15 Business Applications for Artificial Intelligence and Machine Learning. Available at: https://www.forbes.com/sites/forbestechcouncil/2018/09/27/15-businessapplications-for-artificial-intelligence-and-machine-learning/#2190620579f2
Gowda, K. R. (2023). AI in education and beyond: transforming customer experiences and sectorial practices in the digital economy. Review of Artificial Intelligence in Education, 4, e8. https://doi.org/10.37497/rev.artif.intell.educ.v4i00.8
Hendershott, T., & Riordan, R. (2013). Algorithmic Trading and the Market for Liquidity. Journal of Financial and Quantitative Analysis Vol. 48. Available at: https://faculty.haas.berkeley.edu/hender/ATMonitor.pdf
Jabłonska, M.R. and Pólkowski, Z. (2017). Artificial Intelligence -Based Processes in SMEs. Studies & Proceedings of Polish Association for Knowledge Management, [online] (86), pp.13–23. Available at: https://www.researchgate.net/publication/324966059_ARTIFICIAL_INTELLIGENCE-BASED_PROCESSES_IN_SMES [Accessed 15 Mar. 2023].
Jain, S. (2022). Indian SME: Integrating advance AI into their businesses. The Times of India. [online] Available at: https://timesofindia.indiatimes.com/blogs/voices/indian-sme-integrating-advance-ai-into-their-businesses/ [Accessed 17 Mar. 2023].
Javelin Strategy Report. (2015). False-Positive Card Declines Push Consumers to Abandon Issuers and Merchants. Available at: https://www.javelinstrategy.com/pressrelease/false-positive-card-declines-push-consumers-abandon-issuers-and-merchants
Joska Junior, J., Bertoldi, W. J., Santos, R. C. dos, & Belli, R. F. (2023). Application of artificial intelligence in a technology startup company. Review of Artificial Intelligence in Education, 4, e19. https://doi.org/10.37497/rev.artif.intell.educ.v4i00.19
King, B. (2018). Bank 4.0: Banking everywhere, never at a bank. John Wiley & Sons. doi:10.1002/9781119506515
Kose, U. and Sert, S. (2017). Improving Content Marketing Processes with the Approaches by Artificial Intelligence. Ecoforum, [online] 6(1), pp.1–8. Available at: https://www.ceeol.com/search/article-detail?id=585926 [Accessed 15 Mar. 2023].
Kronivets, T., Yakovenko, O., Tymoshenko, Y., Ilnytskyi, M., Iasechko, S., & Iasechko, M. (2023). Legal and ethical dimensions of AI in education: navigating new frontiers. Review of Artificial Intelligence in Education, 4, e21. https://doi.org/10.37497/rev.artif.intell.educ.v4i00.21
Lampou, R. (2023). The integration of artificial intelligence in education: opportunities and challenges. Review of Artificial Intelligence in Education, 4, e15. https://doi.org/10.37497/rev.artif.intell.educ.v4i00.15
Lu, X., Wijayaratna, K., Huang, Y. and Qiu, A. (2022). AI-Enabled Opportunities and Transformation Challenges for SMEs in the Post-pandemic Era: A Review and Research Agenda. Frontiers in Public Health, [online] 10. Available at: https://www.frontiersin.org/articles/10.3389/fpubh.2022.885067/full [Accessed 15 Mar. 2023].
Medium. (2019). 7 Ways AI Can Improve Customer Experience. ChatbotNews. Available at: https://chatbotnewsdaily.com/7-ways-ai-can-improve-customer-experiencebe015f2834ba
Menkveld, J. A. (2014). High‐Frequency Traders and Market Structure. Available at: https://onlinelibrary.wiley.com/doi/pdf/10.1111/fire.12038
Mitchell, C. (2019). The Two Biggest Flash Crashes of 2015. Investopedia. Available at: https://www.investopedia.com/articles/investing/011116/two-biggest-flash-crashes2015.asp
Mubarak. (2019). Alarming Influence of AI and Chatbot in the Banking and Finance Industry. Available at: https://www.mubarak.om/ai-and-chatbot-in-banking-and-finance/
OECD (2021). The Digital Transformation of SMEs. [online] OECD Studies on SMEs and Entrepreneurship. OECD. Available at: https://www.oecd.org/industry/smes/PH-SME-Digitalisation-final.pdf [Accessed 17 Mar. 2023].
Rohner, P., & Uhl, W. M. (2017). Robo-Advisors versus Traditional Investment Advisors: An Unequal Game. The Journal of Wealth Management. Available at: https://doi.org/10.3905/jwm.2018.21.1.044
Rybalko , P. (2024). The evolution of artificial intelligence: problems and prospects of rational cognition . Review of Artificial Intelligence in Education, 5(00), e029. https://doi.org/10.37497/rev.artif.intell.educ.v5i00.29
Seth, S. (2019). The World of High-Frequency Algorithmic Trading. Investopedia. Available at: https://www.investopedia.com/articles/investing/091615/world-high-frequencyalgorithmic-trading.asp
Silva, A. de O., & Janes, D. dos S. (2023). Challenges and opportunities of artificial intelligence in education in a global context. Review of Artificial Intelligence in Education, 4, e1. https://doi.org/10.37497/rev.artif.intell.education.v4i00.1
Silva, R., Noronha, M., & Ferraro, D. M. J. (2023). Determinants of edtech success: an empirical analysis of dynamic capabilities and key facilitators. Review of Artificial Intelligence in Education, 4, e16. https://doi.org/10.37497/rev.artif.intell.educ.v4i00.16
Somani, P. (2023). Emerging role of artificial intelligence in product recommendation. Review of Artificial Intelligence in Education, 4, e11. https://doi.org/10.37497/rev.artif.intell.educ.v4i00.11
Thompson, C. (2014). Cybercrime Costs Global Economy $400 Billion: Report. CNBC. Available at: https://www.cnbc.com/2014/06/09/cybercrime-costs-global-economy400-billion-report.html
Van Liebergen, B. (2017). Machine Learning: A revolution in Risk management and Compliance? Available at: https://ideas.repec.org/a/ris/jofitr/1592.html
Veerla, V. (2021). To Study the Impact of Artificial Intelligence as Predictive Model in Banking Sector: Novel Approach. International Journal of Innovative Research in Technology, 7(8). 94-105.
Weisbach, S. M., Tan, C., Stern, H. L., & Erel, I. (2019). Selecting Directors Using Machine Learning. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3144080
Wewege, L. (2017). The Digital Banking Revolution. Lulu.com.
![](https://esglawreview.org/public/journals/13/article_1624_cover_en_US.png)
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 ESG Studies Review
![Creative Commons License](http://i.creativecommons.org/l/by/4.0/88x31.png)
This work is licensed under a Creative Commons Attribution 4.0 International License.