Applications and issues of artificial intelligence in the financial sector

Yanyu Chen

doi:10.54254/2755-2721/87/20241577

Research Article

Open access

Published on 31 July 2024

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Chen,Y. (2024). Applications and issues of artificial intelligence in the financial sector. Applied and Computational Engineering,87,54-65.

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Applications and issues of artificial intelligence in the financial sector

Yanyu Chen *^,1,

¹ School of AI and Advanced Computing, Xi'an Jiaotong-Liverpool University, Suzhou, China

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2755-2721/87/20241577

Abstract

This paper investigates the application of artificial intelligence in the financial sector, analyzing the existing technical, ethical, and legal issues, and proposing corresponding solutions. The research background highlights the widespread use of AI technology in the financial industry and the efficiency and cost benefits it brings. The research focuses on challenges related to data quality, feature engineering, model complexity, real-time capability, computational resources, and data privacy protection. The research method includes literature review and case analysis, revealing the applications of AI technology in stock prediction, risk management, trading strategy optimization, and customer service. The results indicate that effective data cleaning, automated feature engineering, model simplification and regularization techniques, the use of interpretability tools like LIME and SHAP, and the introduction of fairness evaluation standards can significantly enhance AI model performance and transparency. The conclusion points out that these measures can not only solve the current technical and ethical issues of AI in the financial sector but also promote the widespread application and standardization of AI technology in other fields.

Keywords

Artificial Intelligence, Financial Sector, Model Interpretability, Issues.

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Cite this article

Chen,Y. (2024). Applications and issues of artificial intelligence in the financial sector. Applied and Computational Engineering,87,54-65.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 6th International Conference on Computing and Data Science

Conference website: https://www.confcds.org/

ISBN：978-1-83558-585-6(Print) / 978-1-83558-586-3(Online)

Conference date: 12 September 2024

Editor：Alan Wang, Roman Bauer

Series: Applied and Computational Engineering

Volume number: Vol.87

ISSN：2755-2721(Print) / 2755-273X(Online)

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