Applications and Challenges of Artificial Intelligence in Modern Financial Decision-Making

DOI

10.2991/978-94-6239-604-3_20How to use a DOI?

Keywords

AI; financial decision-making; machine learning; ethics; regulatory frameworks

Abstract

Artificial intelligence (AI) is fundamentally reshaping financial decision-making by enabling a paradigm shift from traditional experience-based approaches to data-driven methodologies, as evidenced by widespread adoption across banking, trading, and risk management sectors. This transformation leverages machine learning and deep learning techniques to achieve significant efficiency gains, including an improvement in fraud detection accuracy, enhanced credit scoring inclusivity through alternative data analysis, and optimized algorithmic trading strategies. However, these advancements are accompanied by critical challenges, such as data privacy vulnerabilities, algorithmic biases that perpetuate historical discrimination, and the transparency issues in complex AI models. The core argument of this paper emphasizes that sustainable AI integration requires a balanced approach–harnessing technological innovation while addressing ethical and regulatory concerns through explainable AI (XAI), robust data governance, and adaptive regulatory frameworks like sandbox environments. By synthesizing empirical evidence from patent analyses and case studies, this study provides a comprehensive overview of AI’s dual impact on financial efficiency and risk, highlighting the necessity for continued collaboration between technologists, regulators, and financial institutions to foster trustworthy and inclusive financial systems.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Jiawei Zang
PY  - 2026
DA  - 2026/02/26
TI  - Applications and Challenges of Artificial Intelligence in Modern Financial Decision-Making
BT  - Proceedings of the 5th International Conference on Economic Development and Business Culture (ICEDBC 2025)
PB  - Atlantis Press
SP  - 185
EP  - 193
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-604-3_20
DO  - 10.2991/978-94-6239-604-3_20
ID  - Zang2026
ER  -