AI Ethics in Financial Decision-Making

Artificial Intelligence (AI) has totally transformed financial decision-making by enhancing fraud prevention, risk assessment, and productivity. It also causes serious ethical issues such as accountability, transparency, and bias. Unconscious biases in previous data are most likely to be transferred to AI-based financial systems such as automated lending websites and credit scoring systems, resulting in discriminatory or unfair results. Since it is not easy for banks and regulators to comprehend and track algorithmic judgments, transparency of AI models makes trust matters harder. Furthermore, accountability questions remain in instances of ethics violations or mistakes made by AI. The moral implications of AI in making financial decisions are discussed in this chapter, in addition to the challenges in being transparent in automated systems, developing biases in algorithmic models, and the law's need for accountability. The chapter explores case studies of moral AI failure and best practices in trying to provide a roadmap for accountable AI regulation in finance.