Powering the Digital Economy: Opportunities and Risks of Artificial Intelligence in Finance

Author: El Bachir Boukherouaa, Mr. Ghiath Shabsigh, Khaled AlAjmi, Jose Deodoro, Aquiles Farias, Ebru S Iskender, Mr. Alin T Mirestean, and Rangachary Ravikumar

This paper discusses the impact of the rapid adoption of artificial intelligence and machine learning in the financial sector.

Volume/Issue: Volume 2021 Issue 024

Publication date: October 2021

ISBN: 9781589063952

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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Finance , Business and Financial , Artificial Intelligence , Machine Learning , Financial Stability , Embedded Bias , Financial Regulation , Cybersecurity , Risk Management , Data Privacy , ML system , ML in finance , machine learning algorithm , strategy landscape , ML deployment , Artificial intelligence , Financial sector , Machine learning , Cyber risk , Financial sector stability , Global , machine learning capability , IMF Library , Anti-money laundering and combating the financing of terrorism (AML/CFT) , Fintech

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Summary

This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.