45 GenAI in Banking & Finance:Ethical and Responsible AI in Finance
Ethical and Responsible AI in Finance Risk, Governance, and Strategic Advantage in the Age of Intelligent Systems 1. Introduction Artificial Intelligence has transformed financial services. From credit scoring and fraud detection to portfolio optimization and customer segmentation, AI systems increasingly influence high-stakes decisions. However, a fundamental question arises: If an AI system denies someone a mortgage, who is accountable? Is it: The algorithm? The data scientist? The bank? The regulator? In finance, AI ethics is not speculative. It directly affects: Access to credit Financial inclusion Consumer protection Institutional trust Ethical AI in finance is therefore not only a technological challenge — it is a governance, regulatory, and strategic imperative. 2. Why Ethical AI Is Different in Finance AI applications in social media or entertainment may tolerate minor errors. Financial AI cannot. Finance is: Highly regulated Tru...