Financial Sector Research Articles

Harnessing LLMs for Financial Forecasting: A Systematic Review of Advances in Stock Market Prediction and Portfolio Optimization

Abstract: This review paper examines the rapidly evolving landscape of Large Language Models (LLMs) in financial analysis, synthesizing recent advances and applications in this transformative field. We trace the progression from traditional natural language processing (NLP) methods to contemporary language models in financial applications, showing how these technologies are reshaping market analysis, risk assessment, fraud detection, and investment decision-making across various financial sectors. The paper offers an in-depth overview of LLM architectures and approaches used in finance, covering both general-purpose models adapted for financial tasks and specialized models tailored for industry needs. Through systematic analysis of the latest research and empirical studies, we assess the capabilities of LLMs in processing diverse financial data sources, including real-time market data, news articles, social media sentiment, earnings calls, and regulatory filings, enhancing insights and predictive accuracy. We identify key challenges in LLM implementation, such as the need for real-time data processing, high accuracy, and interpretability, crucial for trust and adoption in high-stakes contexts. Additionally, we explore emerging trends and future research directions, highlighting both the transformative potential and limitations of LLMs as they redefine analytical frameworks and decision support in finance. This review underscores the need for ongoing research to bridge gaps and fully realize LLMs’ potential in reshaping financial analysis and practices

Blockchain’s Role in Finance beyond Cryptocurrency

The rapid emergence of blockchain technology outside of cryptocurrency in financial applications. Blockchain, mostly known as the underlying technology backing decentralized currencies such as Bitcoin, is today being tapped for a range of other financial services by its underlying features: decentralization, transparency, and security. The research explores blockchain's role in advancing transaction processing, auditability, andinnovations such as decentralized finance and smart contracts that are changing traditional financial systems. The paper elaborates on how this technology benefits from efficiency relating to points of asset management, trade finance, and financing in the supply chain. It further goes into blockchain security and privacy challenges associated with these new technologies being adopted in areas such as these. This survey synthesizes recent insights to identify crucial opportunities and challenges for blockchains in the financial sector in bringing systemic change across global markets

Digital transformation strategies in the financial services sector

The main objective of this research is to conduct a thorough analysis of the digital transformation tactics employed in the specific subsector of the financial services industry that has been selected for study. The objective of this study is to provide a comprehensive analysis of the distinct problems, opportunities, and repercussions that are linked to the process of digital transformation within this particular subsector. Through this endeavor, this research provides a valuable contribution to the existing body of knowledge in this particular domain, thereby enabling industry leaders, policymakers, and other relevant stakeholders to make more well-informed decisions., a mixed-methods research design was used in this study. This technique integrates qualitative and quantitative methodologies to offer a holistic comprehension of digital transformation initiatives within a specific subsector of the financial services industry. The results of this research underscore the significance of digital transformation initiatives in improving consumer experiences, meeting regulatory requirements, and capitalizing on technical progress. The obstacles that have been identified, such as the need to comply with regulations and address cybersecurity issues, highlight the intricate environment that financial institutions must navigate. Furthermore, the acknowledgment of customer-centric approaches and the significance of data analytics and personalization validate the industry's ability to adjust to client preferences and competitive dynamics.

Global Banking Regulations and Performance: A Study of Basel III Implementation in Developing and Developed Nations

This study explores the impact of Basel III regulations on bank performance in both developing and developed countries. A stable financial system is recognized as a key driver of economic growth, with banks playing a central role in facilitating technological advancements and economic development. However, advancements in global banking, alongside financial crises such as the 2007-08 global downturn, have highlighted the need for robust risk management frameworks. The Basel norms, particularly Basel III, were introduced to strengthen capital requirements, liquidity buffers, and supervisory processes to mitigate systemic risks. This research compares the effects of Basel III on banks in five developing countries (Bangladesh, India, Malaysia, Sri Lanka, Thailand) and five developed countries (Canada, France, Germany, the UK, USA), focusing on changes in efficiency and productivity. By examining these countries' progress in Basel III implementation, the study offers valuable insights into how global banking regulations impact bank performance, highlighting differences across economic contexts and contributing to a deeper understanding of financial sector stability.

Reinforcement Learning-Based Model for Enterprise Financial Asset Risk Assessment and Intelligent Decision-Making

Abstract. This study discusses the application of reinforcement learning (RL) in financial asset risk assessment, especially how to improve the ability of risk prediction and asset portfolio optimization through deep reinforcement learning (DRL) model. This paper experimentally verifies the advantages of DRL models in improving forecasting accuracy and risk management efficiency and discusses the potential impact of AI technology in the financial sector. The findings show that despite challenges such as data quality and model interpretation, the application of AI technology provides financial institutions with more precise and flexible risk management tools, driving further development of fintech.

Regulating Artificial Intelligence to Advance Financial Inclusion in South Africa

The emergency of Artificial Intelligence (AI) endowed with capabilities to simulate human intelligence through software-coded operations, has become a topical issue perplexing the minds of regulators, government officials, non-governmental organisations, and the public, across the globe. Linked to this increasing AI debate, is the view that these technologies have the potential to facilitate financial inclusion. Whilst there are concomitant liability and cyber-security related issues associated with AI adoption, the importance of AI in facilitating financial inclusion cannot be overstated. AI can facilitate financial inclusion by enhancing the quality of financial services products and services offered by key players in the South African financial sector, including the capacity to improve the process of opening bank accounts, data analysis, assessment of credit scores, and the management of risk-linked to various financial products. Drawing significant lessons from a select study of the EU and UK model on the regulation of AI, this article argues that there is a need for South Africa to develop an effective regulatory framework governing AI in pursuit of advancing the goals of financial inclusion, among other things. In finality, the article offers pertinent recommendations in search of avenues for developing policies, principles, norms, and rules that govern AI in South Africa to advance financial inclusion and other important related goals.

The interplay of economic policy uncertainty and corporate investment: analyzing the moderating influence of financial sector development in BRICS

The interplay of economic policy uncertainty and corporate investment: analyzing the moderating influence of financial sector development in BRICS

Research on Credit Card Fraud Risk Identification Based on Integrated Logistic Regression Model

Effectively identifying credit card fraud using machine learning methods is a significant issue in the financial sector. In this context, machine learning models encounter challenges such as the imbalanced distribution of sample data labels and the high dimensionality of customer feature sets. Addressing these two critical factors, this paper develops an enhanced method for the logistic regression model. This approach not only balances the sample label distribution through resampling but also mitigates the estimation issues arising from the curse of dimensionality. Furthermore, the proposed method addresses the coverage issue of the entire feature set. It solves that resampling can only partially address the curse of dimensionality problem and employs L1 regularization for each logistic regression submodel to further alleviate this issue. Results from simulation experiments and real-world data analysis demonstrate that the proposed method is competitive with logistic regression and several classical classification techniques. This method is not only effective in resolving credit card fraud risks but also has the potential to be extended to other domains.

How Cloud Computing is Facilitating Interoperability in Banking and Finance

This comprehensive article examines the transformative role of cloud computing in enabling interoperability within the banking and financial services sector. The article explores how cloud technologies revolutionize banking by facilitating unprecedented integration, efficiency, and innovation across systems. Through analysis of recent industry research and empirical data, the article investigates key aspects, including implementation benefits, operational improvements, and critical challenges. The findings demonstrate that cloud-enabled interoperability has become a strategic imperative for financial institutions, driving enhanced customer experiences, operational efficiencies, and innovative capabilities. The article also addresses significant security, compliance, and legacy system integration considerations, providing insights into how financial institutions can navigate these challenges while leveraging cloud technologies for competitive advantage in an increasingly digital banking ecosystem.

A Study of The Effect of Stock Liquidity on Enterprise Risk-Taking Level

Stock liquidity, as one of the important market characteristics of enterprises, not only affects the financing of listed enterprises, but also affects the risk decision of enterprise management, which in turn affects enterprise risk-taking level. In order to deeply explore the impact of stock liquidity on enterprise risk-taking level, this paper selects all the data of Shanghai and Shenzhen A-share listed companies from 2000 to 2023 in the Cathay Pacific CSMAR database as samples, and eliminates data from financial sector firms, and from companies designated as ST or ST*. Additionally, it excludes any instances where key financial metrics are incomplete or absent.After that, we carry out the descriptive statistics and correlation analysis of the samples, and conduct a analysis of the impact of stock liquidity on enterprise risk-taking level. Meanwhile, descriptive statistics and correlation analysis are carried out on the samples, and a two-way fixed-effects model regression is conducted around the impact of stock liquidity on enterprise risk-taking level, and lagged one period method, replacing the explained variables method and instrumental variables method are chosen to conduct the robustness test. Finally, it is concluded that stock liquidity is significantly positively correlated with enterprise risk-taking level, but there is no difference between the level of significance of the state-owned enterprises and that of the non-state-owned enterprises.And the conclusions obtained are robust.

Peran Environmental Performance dan Green Accounting Sebagai Moderasi Pengaruh Profitabilitas dan Dewan Komisaris Terhadap CSR Utk Mensupport CoP

Each country included in the CoP gathers to conduct a review related to the United Nations Framework Convention on Climate Change, or UNFCCC, which is a major UN treaty. The major UN treaty states that countries need to come together to find out how to stop global warming. The COP has the main task of reviewing each country's targets related to proposed emissions. The implementation of the COP will rotate between five UN regions, namely Africa, Asia, Latin America and the Caribbean, Central and Eastern Europe and Western Europe and others. In its 26th event, the COP has four focus issues of discussion including the importance of switching to electric vehicles, ending deforestation with financial assistance, drafting rules for the global carbon market, and mobilizing funds for developing countries. This study aims to analyze the effect of profitability on CSR Disclosure, the influence of the board of commissioners on CSR disclosure, the role of Environmental performance as a moderation of the influence of profitability on CSR Disclosure, the role of Green Accounting as a moderation of the influence of profitability on CSR Disclosure, the role of Environmental performance as a moderation of the influence of the board of commissioners on CSR Disclosure and the role of Green Accounting as a moderation of the influence of the board of commissioners on CSR Disclosure. This study took the research population from financial sector companies listed on the Indonesia Stock Exchange for the period 2019-2022. Based on the results of this study, it shows that Profitability has a significant effect on CSR Disclosure, the Board of Commissioners does not affect CSR Disclosure, Environmental Performance strengthens the effect of Profitability on CSR Disclosure, Green Accounting does not strengthen the effect of Profitability on CSR Disclosure. Environmental Performance does not strengthen the effect of the Board of Commissioners on CSR Disclosure. Green Accounting does not strengthen the effect of the Board of Commissioners on CSR Disclosure

The Development of Economics Education: Focus on Banking Management and Entrepreneurship

The aim of this research is to identify the development of economic education in Indonesia which focuses on bank management and entrepreneurship, analyze the factors that influence the successful implementation of economic education related to these two fields, and develop recommendations for developing a more effective economic education curriculum to improve financial skills and entrepreneurship among students. The method used in this literature study is library research, which involves collecting data through various library sources such as books, encyclopedias, documents and scientific journals. Overall, the results of previous research show that although there has been progress in the development of economic education with a focus on bank management and entrepreneurship, there are still many challenges that need to be overcome. Economic education in Indonesia needs to further strengthen practical aspects and skills by collaborating with the industrial world and the financial sector to provide real experience to students. Apart from that, integration between bank management and entrepreneurship in the economic education curriculum will be more optimal if it is supported by adequate facilities, teacher training and the use of technology. Therefore, it is recommended that the government, educational institutions and the private sector can work together to strengthen educational curricula that are more relevant to market needs and global economic challenges.

Time-varying Macro-Financial Linkages across Developed Countries

The paper examines time-varying linkages between the financial and macroeconomic sectors across 13 developed countries. To do so, the paper studies whether the financial sector is an important source of shock to the macroeconomic sectors across countries. The paper finds evidence of time-varying impacts of the financial shocks on the macroeconomic sectors across countries. There are evidence of time variation in both the transmission and the size of the shocks. Different financial shocks play important roles in different financial shocks. For instance, The US house-price shock plays an important role in the Global Financial Crisis. The model also captures the large degree of heterogeneity in the effect of a financial shock across countries.

The Adoption of Taxonomy Requirements to Facilitate the Green Transition of the Buildings Sector

For direct investment towards activities that significantly contribute to the achievement of the European Green Deal objectives, the European Union has adopted “Taxonomy Regulation”, which also applies disclosure requirements to financial institutions that finance the construction, renovation, or acquisition of buildings. For this reason, the financial sector needs methodologies and guidelines, adapted to the national situation, to define the primary energy thresholds to be used when assessing sustainability and financing the acquisition of real estate. This paper presents the methodology developed to identify 15% and 30% of the most energy-efficient national building stock in Lithuania based on EPC data. As a result, functional primary energy indicator (FPEI) threshold values are set for 17 distinct categories of existing buildings built by 31 December 2020. The 15% FPEI thresholds range from 81 kWh/m2 for warehouse buildings to 228 kWh/m2 for swimming pool buildings. Similarly, the 30% FPEI thresholds span from 104 kWh/m2 for warehouses to 303 kWh/m2 for foodservice buildings. The methodologies and threshold values are compared to other countries’ practice and recommendations are provided.

Impact of Security, Perceived Usefulness, and Brand Image on Fintech Adoption and Customer Satisfaction in Pakistan’s Financial Sector

Fintech enhances customer satisfaction by simplifying payment processes and fostering trust, essential for positive engagement. Despite growing adoption in Pakistan and globally, security concerns, such as theft and inadequate measures, create customer apprehension. To increase trust and adoption, enterprises must implement strong security systems and awareness campaigns. While brand image has little impact on fintech adoption, a positive reputation fosters trust. Key factors for adoption include perceived usefulness, ease of use, and trust in the technology. A Cronbach’s alpha of .930 confirms high reliability in mobile banking service quality. Trust and security are crucial for widespread fintech acceptance.

Customer Perception Towards Customer-Centric Strategies of Private Sector Banks

Introduction: In the Indian financial market, banking plays a very vital role. Banking is the biggest dealer of credit and most of the people invest in banks as savings. Global economic progress depends on banking. The reason for this is that a well-developed financial sector is seen as essential and acts as a gauge for a nation's overall economic health. The banking sector is the most robust and prosperous in our nation. In addition to fierce competition among banking firms for customers, the Indian banking industry is engaged in a profit war. Try to learn about the tactics used by private sector banks in this article to draw in and keep consumers. It also makes an effort to comprehend how clients view banks in the private sector. Objectives: This study aims to explore the strategies employed by private sector banks in India to attract and retain customers within a highly competitive financial market. It seeks to understand customer perceptions of private sector banks and evaluate the role of the banking sector in supporting economic growth and financial stability. Methods: The study examines various marketing and customer service strategies used by private sector banks to attract and engage clients. It includes a review of competitive tactics within the banking sector, with a focus on customer acquisition, loyalty programs, and personalized services. Additionally, the research assesses customer perceptions through surveys and analysis of customer satisfaction metrics in relation to private sector banks. Results: The findings reveal that private sector banks employ a variety of strategies, including personalized services, digital banking options, and loyalty programs, to attract and retain customers. Customer perception of private sector banks is generally positive, with clients valuing the convenience, technological advancements, and customer-focused services offered by these institutions. The competitive nature of the banking industry has led to innovation and improved customer experience, contributing to the sector's robust growth. Conclusion: The study highlights the essential role of private sector banks in supporting the Indian economy by promoting financial inclusion and innovation. Effective strategies for customer attraction and retention, coupled with a focus on customer satisfaction, have strengthened the position of private sector banks within the competitive banking landscape. These insights can guide future efforts to enhance customer engagement and sustain growth within India's financial sector.

A Theoretical Framework Analyzing Impact of Embedding Entrepreneurial Skills in Education on Economical Growth

Background: The growth of any country's economy owes much on the contributions of its entrepreneurs. Employment creation, income contribution, rural development, industrialization, technological advancement, export promotion, etc. are all bolstered by a nation's entrepreneurial spirit. There has been periodic government programs in India aimed at fostering entrepreneurship. The Indian government has begun to take an interest in the topic of entrepreneurship. Startup India is only one of many high-profile programs designed to foster growth in the private sector. The effectiveness of teaching innovation and entrepreneurship to university students has come under scrutiny as they try to prepare themselves for a dynamic job market. Objectives: University students' job-seeking mindsets, innovative and practical skill development, innovative and practical ability development, core entrepreneurial competitiveness, entrepreneurship and innovation comprehensive quality, etc. are all examined in this research. The current state of education regarding entrepreneurship and innovation in higher education is evaluated in order to identify and strengthen the aspects that are having a beneficial impact on students' learning. The innovative and entrepreneurial potential of today's university students has never been more crucial, since studies demonstrate that entrepreneurship has a major impact on economic growth. Methods: From the standpoint of planned behavior theory, this research examines how entrepreneurship education influences the intent to start a business. By investigating the impact of university-level entrepreneurial programs on economic and social progress, a brief analysis is made that impacts the growth of financial sector in India. Education on entrepreneurship in universities is essential for inspiring and motivating students to start their own firms. This research presents a theoretical model of the connection between entrepreneurial skills and intending to be entrepreneurial as taught in academics dedicated to the study of entrepreneurship. Results: This research presents a thorough analysis on demographics of entrepreneurs, the psychological and behavioral traits of university students, and the external influences on entrepreneurs through questionnaires and in-depth interviews. Conclusion: Students' entrepreneurial drive and choices were found to be influenced by their backgrounds and characteristics. In addition, the objective characteristics of the potential entrepreneurs are the students' subjective desires and interests.

Engaging workers with disabilities in the financial sector: exploring promising practices through key informant interviews and a rapid literature review

PurposeThis study explores the challenges, barriers and opportunities for engaging persons with disabilities in employment in the Canadian financial sector.Design/methodology/approachWe situated this research within a critical disability conceptual framework to add to existing theories of employee engagement. We conducted an exploratory qualitative study of key informant interviews of the experiences of diverse persons with disabilities in the Canadian financial sector.FindingsWe found that the financial sector has the potential to be a leader in the engagement of workers with disabilities. Key challenges include corporate bureaucracy and a focus on aggressive growth that perpetuates ableist norms of individualism, self-reliance and competitive achievement. Key informant interviews indicated that opportunities for engagement can be fostered by committed leadership, inclusive corporate culture, supportive management, and respectful and responsive workplace accommodations.Originality/valueThis article contributes to the literature on opportunities for equity, diversity and inclusion at work through a critical exploration of the challenges and promising practices associated with supporting engagement of persons with disabilities in the Canadian financial sector and beyond.

AI-Powered Cybersecurity in Financial Institutions: Enhancing Resilience Against Emerging Digital Threats

It is evident that the world of Financial Technology is evolving rapidly, as financial institutions are regularly faced with an escalating threat from increasingly sophisticated cyber-attacks, which artificial intelligence (AI) can help transform the approach to create a much more resilient cybersecurity. In this paper, we study the effectiveness in building robust digital defenses in the financial sector through the usage of AI driven methodologies toward threat detection, incident response, and the ability to do a quick mitigation. This study synthesizes recent manifestations of AI as applied to the financial institutions industry using a rigorous datacentric methodology, evaluating AI applications, including machine learning based anomaly detection, predictive analytics, and automated threat intelligence. Research conducted by Soni et al. (2022) indicates that such AI enhanced cybersecurity can cut the time to react to security incident in more than 40 percent (Soni, 2022), while machine learning algorithms-based systems that been used in high risk environment has made their detection rate as high as 92 percent (Jiang & Yin, 2023). The findings show that AI Powered models enormously reduce risk and improve real time monitoring, while incident response framework is strengthened. In terms of implications for financial sector stakeholders and policymakers, this study’s addition offers crucial insights for an AI–enabled resilient digital infrastructure. We come to a novel conclusion regarding the role of AI in cyber security and propose a set of useful guidelines for financial institutions on how to strengthen security in the face of a changing threat environment.

Mobile Financial Services and the Shadow Economy in Southern African Countries: Does Regulatory Quality Matter?

This study investigated the impact of mobile financial services on the shadow economy in Southern Africa countries and explored how regulatory quality moderates this relationship. Utilising panel data from 1993 to 2022, this study employed dynamic common-correlated effect (DCCE) and dynamic seemingly unrelated regression (DSUR) methods to assess long-run effects. The findings reveal that increased mobile financial services adoption markedly diminishes the scale of the underground economy by enhancing transaction transparency and accessibility, thus drawing more participants into the formal economy. The results are consistent across DCCE and DSUR estimations. Additionally, improvements in regulatory quality further diminish the shadow economy by bolstering trust and compliance within the financial system, suggesting that well-crafted regulations enhance the effectiveness of mobile financial services. Economic and financial sector developments also contribute to a reduced shadow economy, indicating that broader economic growth and advanced financial systems facilitate formal sector participation. Conversely, larger public sector expenditures appear to expand the shadow economy enterprises, likely due to inefficient resource allocation and increased fiscal burdens that push economic activities underground. Policy recommendations include the need to expand mobile financial services infrastructure, enhance financial literacy, and optimise financial regulatory frameworks to balance oversight with innovation encouragement.