AI Revolution: Transforming Risk Management in Financial Institutions
Authors:-Kinil Doshi
Abstract-This article reviews the implications and enhancements that Artificial Intelligence may bring to financial institutions in terms of risk management transformation. In a dynamically evolving environment provided by the progressed state of AI technologies, the transformation solved becomes evolutionary more strategic. This paper examines the power of AI in improving the accuracy, efficiency, and transparency of risk assessments and management processes. A necessary focus is on AI’s possibility to process unlimited data in real-time, thus creating a new paradigm of proactive decision-making and risk assessment by identifying it early in the process. Apart from that, some potential applications such as credit assessment, regulatory compliance, and cybersecurity are also considered, since the latter issues are the field of a problem to institutions where major disruptive innovation is required. The challenges and the moral concern of AI are also discussed, including the pros and cons of data use and the compliance function. Overall, highlighting existing and potential use cases and forward-thinking trends allow for this article to see AI as vital since, in a developing industry, financial institutional survival is impossible without it.
