Bridging AI Governance and Financial Regulation

This study examines the applications, benefits, challenges, and ethical considerations of Artificial Intelligence (AI) in the banking and finance sectors. It reviews current AI regulation and governance frameworks to provide insights for stakeholders navigating AI integration. This study identifies key trends and suggests future research directions. The major findings include an overview of AI applications, benefits, challenges, and ethical issues in the banking and finance industries. Recommendations are provided to address these challenges and ethical issues, along with examples of existing regulations and strategies for implementing AI governance frameworks within organizations. This paper highlights innovation, regulation, and ethical issues in relation to AI within the banking and finance sectors. Analyzes the previous literature and suggests strategies for AI governance framework implementation and future research directions. Innovation in the applications of AI integrates with fintech, such as preventing financial crimes, credit risk assessment, customer service, and investment management. These applications improve decision-making and enhance the customer experience, particularly in banks. Existing AI regulations and guidelines include those from the United States. Challenges include data privacy and security, bias and fairness, accountability and transparency, and the skill gap. Therefore, implementing an AI governance framework requires rules and guidelines to address these issues.