Beyond Banking: AI's Transformative Impact on Financial Stability and Systemic Challenges in the Financial Industry

Authors

  • Yara Mohammed University of North Texas
  • Manar Alsaid East Texas A &M
  • Gahangir Hossain University of North Texas

Keywords:

Artificial Intelligence, Financial Services, Customer Experience, Operational and Ethical Considerations, Systemic Risks

Abstract

Introduction:

Artificial Intelligence (AI) is reshaping the financial industry by transforming key functions in banking, investment, insurance, and capital markets. As financial systems become increasingly data-driven and interconnected, understanding the implications of AI integration has become a critical research problem, particularly in service delivery, risk management, and systemic stability.

Goal:

This study aims to investigate the comprehensive impact of AI adoption across various financial services sectors. It seeks to uncover how AI technologies are redefining operations and strategic decisions while identifying emerging challenges and future trajectories.

Methodology:

The research employs a robust thematic analysis supported by an extensive literature review. It integrates both qualitative and quantitative methods to analyze the evolution, current applications, and potential future developments of AI in finance.

Results:

Findings reveal that AI-driven analytics significantly enhance customer service delivery, enable the personalization of financial products, and optimize risk assessment processes. The study also identifies the strategic value of AI adoption while discussing ethical, privacy, and regulatory issues that financial institutions must navigate.

Conclusion:

AI holds transformative potential for financial services but also introduces new dimensions of systemic risk. Its integration must be managed to leverage benefits while safeguarding financial stability and ensuring compliance with evolving regulatory frameworks.

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Published

2025-12-05

How to Cite

Mohammed, Y. ., Alsaid, M. ., & Hossain, G. . (2025). Beyond Banking: AI’s Transformative Impact on Financial Stability and Systemic Challenges in the Financial Industry. International Congress of Knowledge and Innovation - Ciki, 1(1). Retrieved from https://proceeding.ciki.ufsc.br/index.php/ciki/article/view/1679