Generative Artificial Intelligence in Finance: Risk Considerations

By Ghiath Shabsigh, El Bachir Boukherouaa

August 22, 2023

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Format: Chicago

Ghiath Shabsigh, and El Bachir Boukherouaa. Generative Artificial Intelligence in Finance: Risk Considerations, (USA: International Monetary Fund, 2023) accessed November 21, 2024

Summary

In recent years, technological advances and competitive pressures have fueled rapid adoption of artificial intelligence (AI) in the financial sector, and this adoption is set to accelerate with the recent emergence of generative AI (GenAI). GenAI is a significant leap forward in AI technology that enhances its utility for financial institutions that have been quick at adapting it to a broad range of applications. However, there are risks inherent in the AI technology and its application in the financial sector, including embedded bias, privacy concerns, outcome opaqueness, performance robustness, unique cyberthreats, and the potential for creating new sources and transmission channels of systemic risks. GenAI could aggravate some of these risks and bring about new types or risks as well, including for financial sector stability. This paper provides early insights into GenAI’s inherent risks and their potential impact on the financial sector.

Subject: Artificial intelligence, Economic sectors, Financial crises, Financial Sector, Fintech, Technology

Keywords: AI-machine learning, Artificial intelligence, Cybersecurity, Embedded bias, Financial risks, Financial sector, Financial sector policy and analysis, Financial stability, Fintech, Generative, Generative artificial intelligence in finance, Global, Hallucination, IMF Fintech Note 2023/006, IMF Library, Machine learning, Privacy, Sample generative AI application, Synthetic data

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Fintech Notes No 2023/006
Stock No:

FTNEA2023006
ISBN:

9798400251092
ISSN:

2664-5912

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