AI for Finance: A Comprehensive Review

Abstract

The integration of Artificial Intelligence (AI) in finance has significantly transformed various aspects of the industry, from algorithmic trading and risk management to regulatory compliance and decentralized finance (DeFi). AI-driven models enhance market prediction accuracy, automate trading strategies, and improve fraud detection, thereby increasing efficiency and reducing financial risks. Moreover, AI-powered robo-advisors and credit scoring systems contribute to financial inclusion by offering personalized and data-driven services. Despite these advancements, challenges such as AI explainability, data privacy concerns, algorithmic bias, and regulatory constraints remain critical research areas. Additionally, emerging trends, including quantum computing, AI-enhanced DeFi, and privacy-preserving machine learning, are expected to further shape the future of AI applications in finance. This paper provides a comprehensive review of AI-driven innovations in financial markets, banking services, and regulatory compliance while discussing ongoing challenges and future research directions.