Need for Artificial Intelligence (Ai) to Be Explainable in Banking and Finance: Review of Ai Applications, Ai Black Box, Xai Tools and Principles

27 Pages Posted: 28 Aug 2023

See all articles by Rahul Meena

Rahul Meena

affiliation not provided to SSRN

rajdeep raut

affiliation not provided to SSRN

Akshay Mishra

affiliation not provided to SSRN

Abstract

While the indispensable use of AI in banking sectors has the potential to improve efficiency and accuracy, it also encounters with significant obstacles and possible concerns in the form of black box situation where it becomes difficult to judge the fairness and transparency in decision-making algorithm.  Using XAI instead of AI can help to address the issue of black box and ensures bank’s responsibility and ethical conducts. Literary works on XAI in financial sectors are diverse and cover a wide range of topics through the application of tools like SHAP, LIME, Anchors, Tensor Board, ELI5, Skater and Deep LIFT. However, in banking industries these are limited to specific use cases such as fraud detections and credit risk assessment, which leaves the scope for overall application of XAI for financial inclusion. This study synthesizes the findings of prior research results, highlights the problems of AI black box in risk assessment and transparency issues, and provides a future direction in the form of research questions covering five dimensions of AI in banking i.e. AI black box, XAI, XAI tools and XAI principals.

Keywords: Artificial intelligence, Explainable Artificial Intelligence, AI Black Box, literature review, Banking

Suggested Citation

Meena, Rahul and raut, rajdeep and Mishra, Akshay, Need for Artificial Intelligence (Ai) to Be Explainable in Banking and Finance: Review of Ai Applications, Ai Black Box, Xai Tools and Principles. Available at SSRN: https://ssrn.com/abstract=4554614 or http://dx.doi.org/10.2139/ssrn.4554614

Rahul Meena

affiliation not provided to SSRN ( email )

No Address Available

Rajdeep Raut (Contact Author)

affiliation not provided to SSRN

Akshay Mishra

affiliation not provided to SSRN ( email )

No Address Available

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