Artificial Intelligence Advances and Their Repercussions on the Financial System

The recent rapid advancement of AI and ML has led to their widespread usage in many sectors of the financial system and their significant influence on the financial sector. The advent of a number of cutting-edge financial services like sophisticated consultation, intuitive lending, supervision and warning systems, and intelligent customer assistance when appropriate has been made possible by artificial intelligence technology, which has significantly transformed the whole financial industry. This paper seeks to provide a concise overview of the development, implementation, and effects of AI & ML in the financial system. In the meanwhile, it has become clear that artificial intelligence has caused a number of issues and concerns throughout its use. Finally, based on the issues highlighted by financial risk mitigation raised by artificial intelligence, some recommendations and techniques are offered for the responsible use of AI in financial risk management.