Artificial Intelligence Impact Evaluation: Transforming Paradigms in Financial Institutions

Abstract

Artificial Intelligence (AI) is a term shaped by socio-behavioural rationales of human capabilities. AI is broadly characterized by a suite of technologies and capabilities, which are largely autonomous and predictive. Expectations of AI are derived and often benchmarked against human intelligence. The corollary is understanding that AI may be approached by attempting to understand human intelligence itself. The pace of AI application in industry is clearly accelerating as companies begin to leverage AI to increase profitability and achieve scale. This review is centred around how AI is currently being applied in Financial Institutions providing services by covering key implementation aspects, underpinning new products and services, playing a strategic role in digital transformation. This also covers how financial service providers across the globe are meeting the challenges of AI adoption with its emerging risks and regulatory implications, as well as the impact of AI on the competitive landscape and employment levels. In the findings, it reveals how AI is expected to galvanize a paradigm shift within the Financial Services industry, driven by data and innovative algorithms to transform business model transformations. Financial Institutions are beginning to leverage AI to increase profitability and achieve scale, but their success will be highly dependent on the evolving investment into use cases, adoption pattern, and regulatory environment.