Year: 2024
Type: article
Abstract: In March of 2022, Silicon Valley Bank collapsed in a large-scale bank run, causing the bank to be placed under the control of the FDIC. Consequently, similar bank failures occurred, such as the collapse of First Republic Bank. These failures were in part caused by lack of oversight on long-term and short-term investments, which continue to threaten banks today. However, with novel AI technology in the middle and back offices of banking institutions, many of these risks might be mitigated. Using a wide variety of models, banks can use artificial intelligence to mitigate credit risk, operational risk, financial crime, security breaches, and macroeconomic risk. While these solutions can be time and cost-effective, they do have significant roadblocks associated with them, such as the lack of scalability, possible conflict with ethics and regulatory mandates, and a decrease in job opportunities due to heavy automation. However, each of these barriers to success has a solution which allows banks to more easily implement AI into their infrastructure.
Source: Journal of Student Research
Authors: Anahadh Multani, Ethan Case
Language: English
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4413563433