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Powering the Digital Economy: Opportunities and Risks of Artificial Intelligence in Finance
Author:
El Bachir Boukherouaa
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Mr. Ghiath Shabsigh
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Khaled AlAjmi
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,
Jose Deodoro
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,
Aquiles Farias https://isni.org/isni/0000000404811396 International Monetary Fund

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Ebru S Iskender
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Mr. Alin T Mirestean
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Rangachary Ravikumar
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Series:
Departmental Papers
Volume/Issue:
Volume 2021: Issue 024
Language:
English
Publication Date:
22 Oct 2021
DOI:
https://doi.org/10.5089/9781589063952.087
ISBN:
9781589063952
ISSN:
2616-5333
Pages:
34
Keywords:
Artificial Intelligence, Machine Learning, Financial Stability, Embedded Bias, Financial Regulation, Cybersecurity, Risk Management, Data Privacy
Legal-disclaimer:
The Departmental Paper Series presents research by IMF staff on issues of broad regional or cross-country interest. The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.
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Cover Departmental Papers
Departmental Papers
ISSN:
2616-5333
Publisher:
International Monetary Fund