An Empirical Investigation in Analysing the Proactive Approach of Artificial Intelligence in Regulating the Financial Sector

The use of artificial intelligence (AI) within the finance industry can be considered as a transformative approach as it enables the financial institutions to enhance their performance capacity. The use of artificial intelligence within the finance sector helps the industries to streamline the processes and optimise their management efficiently for various types of operations pertaining to credit decisions-making, financial risk assessment and management and quantitative trading. The paper aims at analysing the proactive approach that can be taken with the use of AI in order to enhance effective management within the financial sector. The empirical study conducted in the paper utilizes various types of secondary materials with a qualitative approach. The findings of the study demonstrate the enhanced capacity of AI that can be used for a proactive approach, utilised for the assessment of risks or threats prior to any mismanagement incident. In this regard, fintech companies such as Enova, Ocrolus, ZestFinance, and DataRobot and so on have taken a predominant position in aiding the financial industries to use AI-based systems that aids the management process. However, the inclusion of AI within the financial sector is faced with certain challenges such as lack of knowledge regarding technological infrastructure, poor financial investment especially for government aided banks, unawareness of the employees and weak collaboration with the IT industry. Regardless, AI technologies in recent years have achieved great advancement, leading to the enhancement of its capacity to assist the effective management within the financial sector.