Exploring the Role of Artificial Intelligence in Financial Risk Assessment

Abstract

Artificial Intelligence (AI) has revolutionized financial risk assessment by enabling more efficient, accurate, and dynamic decision-making processes. This paper explores the transformative role of AI in financial risk management, highlighting the integration of machine learning (ML), natural language processing (NLP), and data analytics. Through AI-driven tools, institutions can predict market trends, evaluate creditworthiness, detect fraud, and assess risks in real-time. AI’s ability to analyze vast data sets, uncover hidden patterns, and adapt to evolving financial landscapes has enhanced risk management strategies. However, challenges such as model transparency, regulatory concerns, and ethical implications remain key issues. This study aims to provide a comprehensive understanding of how AI technologies are shaping the future of financial risk assessment.