Artificial Intelligence in Finance: Transforming

Services, Managing Risks, and Navigating Adoption

Challenges
Yesset Yedres
School of Engineering and Digital Sciences
Nazarbayev University
Astana, Kazakhstan
yesset.yedres@nu.edu.kz

Abstract—Through this article the adoption of AI in financial
sectors is investigated in terms of its contribution in operational
efficiencies, customer service and risk management. In close
connection with the trendy financial framework, AI technologies
are given as an effective answer to the problems including the
prevention of fraud, the generalization of the approaches to
financial services and market forecasting. The study hopes to
fill that hole of knowledge resulting from AI mechanisms and
using behavioral finance in finance as the conventional research,
stand out by undertaking a literature review to bring together
fresh thoughts. The study involves with whether the Artificial In-
telligence(AI) innovations influence the manner financial services
operates and the effects it may have on the operating procedures
and regulations of the industry
This research scrutinizing studies in key financial and technical
journals shows that AI makes banking and management of risk
easier, and provides us with the derivation of behavioral finance.
Research shows that AI increases financial services offerings,
learning capacities for risk assessment and market efficiency.
However, its introduction into the new era is conjunction with
challenges, which include ethics consideration and creation of a
robust regulatory response. This work considers the implications
of AI in financial sphere and provides a comprehensive discussion
of AI potential impact. Also, the paper underlines that further
research has to be interdisciplinary in order for efficient handling
of AI integration and obtaining the benefits it will bring to the
industry, to regulators, and to consumers.
Index Terms—artificial intelligence, financial sector, opera-
tional efficiency, risk management, behavioral finance, fraud
detection, market forecasting, technology adoption, regulatory
frameworks, ethical considerations
within the financial field. It will also touch upon prospective
of AI to transform the financial domain in the same time as
it will demonstrate problems that occur.
Putting all in all the cruise of this investigation lays to
emphasize the urgent need to explain AI in the context of
a new financial world of which future remains unknown.
Previous studies have already done the donkey work by telling
us about the role of AI in fraud detection, lending decisions,
and supplying the most accurate forecasts around. Therefore, a
synopsis that binds the individual strategies to the general the-
ories of behavioural finance in a comprehensive way is an issue
of a matter. With the scarcity of clear writing on this subject
it is very obvious that the purpose of this research is to focus
the particulars of AI effect on finance industry, investigate the
ethical and practical problems technology could give rise to,
and summarize the more comprehensive consequences of these
changes. This research paper based on comprehensive litera-
ture review of the current literature together with analysis of
important cases, significantly contributes not only to academic
interchange but also to the practice of this digitalization front.
Through this identification, we intend to confirm our place in
the academic arena, which does not only provides an overview
on the impact of automation in the financial sector but also
gives a detailed manifestation of the behavioral finance, risk
regulated, and regulatory policy.

I. I NTRODUCTION
Artificial Intelligence (AI) that ushers in the banking sector
stands above the rest as it offers unique services like speed,
less errors, higher risk management capabilities and better
customer service. This prolonged process results in a mixed
realilty of opportunities and challenges which can’t be evenly
separated and are interlinked with the behavioural basis of
financial management and the wide-scale implications for
regulatory frameworks. In the case of the financial industry,
the AI market is faced with a problem of the ethic issue
of use, the issues of privacy concerns and the limitations
in the widespread adaptation. Therefore this paper aimed at
examining which multifaceted influence the AI can provide