Ethical implications of AI-driven financial systems

Saride, Krishna Chaitanya (2025) Ethical implications of AI-driven financial systems. World Journal of Advanced Engineering Technology and Sciences, 15 (1). pp. 1383-1389. ISSN 2582-8266

AI-driven financial systems have transformed traditional banking practices by revolutionizing credit decisions, risk assessments, and investment strategies. These technological advancements present opportunities and challenges in ensuring equitable financial access while maintaining data privacy and security. Integrating AI algorithms in financial services has revealed significant implications regarding gender-based disparities, demographic exclusion, and algorithmic bias. Financial institutions face the challenge of balancing enhanced efficiency with fair lending practices, particularly when utilizing alternative data sources for credit assessment. The transformation extends beyond mere technological implementation, touching upon crucial aspects of consumer protection, regulatory compliance, and social equality. Through examining real-world cases and systematic patterns, critical insights emerge regarding the necessity of robust frameworks to prevent discriminatory outcomes while leveraging AI's potential to expand financial inclusion.