Artificial Intelligence in Financial Decision Making

Abstract

Artificial intelligence (AI), powered by machine learning algorithms, is capable of extracting information efficiently from big data and, therefore, has great potential for improving financial decision-making. In this chapter, we summarize several important applications of AI in this context. First, we review AI algorithms that extract information from unstructured data, with a focus on natural language processing algorithms. Next, we discuss how AI extracts and aggregates information from unstructured and structured data so as to facilitate financial decisions such as investment and FinTech lending. Lastly, we discuss the complementary roles of AI and humans in improving financial decision-making.

Keywords: Artificial Intelligence, Machine Learning, Natural Language Processing, Financial Decision Making, Equity Investment, Fintech Lending

JEL Classification: C38, C45, C61, D81, G11, G12, G14, G32