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Artificial intelligence in financial risk management: A critical comparison of approaches and innovations – Part 1

Author

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  • Orgeldinger, Jörg

    (Philipp Reisstr, Germany)

Abstract

Artificial intelligence (AI) is revolutionising financial risk management by providing innovative tools to address diverse challenges. In two papers in the series ‘Machine Finance’ the author critically examines the integration of AI technologies into the financial sector, emphasising its applications in managing risks such as credit, market, operational and compliance. This highlights the transformative potential of AI-driven models and analytics, which offer enhanced precision, real-time monitoring and robust predictive capabilities. Additionally, this study explores the ethical and regulatory challenges associated with AI adoption, particularly within frameworks such as the European Union (EU) Artificial Intelligence Act (AI Act). By comparing traditional risk management methods with AI-enabled approaches, this paper aims to provide practical insights into the future of financial stability and resilience through advanced AI-driven strategies. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.

Suggested Citation

  • Orgeldinger, Jörg, 2025. "Artificial intelligence in financial risk management: A critical comparison of approaches and innovations – Part 1," Journal of AI, Robotics & Workplace Automation, Henry Stewart Publications, vol. 3(4), pages 293-320, April.
    • Handle: RePEc:aza:airwa0:y:2025:v:3:i:4:p:293-320
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    More about this item

    Keywords

    artificial intelligence; AI; financial risk management; credit risk; EU Artificial Intelligence Act; AI Act; predictive analytics;
    All these keywords.

    JEL classification:

    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • G2 - Financial Economics - - Financial Institutions and Services

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