The Role of Artificial Intelligence in the Transformation of Financial Services

Abstract

The role of Artificial Intelligence (AI) is increasing significantly everywhere. With the use of AI technologies, financial services have become very smooth. AI has enhanced the efficiency and accuracy, along with the decision-making ability of financial service providers. This study examines how artificial intelligence technologies including machine learning, natural language processing, and predictive analytics are used to important financial tasks like algorithmic trading, fraud detection, risk management, credit evaluation, and individualized service to customers. AI-driven systems enable real-time data analysis, automation of routine processes, and improved customer experiences while reducing operational costs and human error. Although these advantages, the use of AI in financial services poses challenges when it comes to model transparency, ethical issues, data protection, and adherence to regulations. This study also reviews recent academic literature and industry practices to evaluate both the opportunities and limitations associated with AI implementation. The results highlight that in order to ensure responsible and reliable financial innovation, solid governance structures, ethical norms, and human oversight are necessary for the successful and long-term use of AI.