Generative Artificial Intelligence in Finance
by Pethuru Raj Chelliah, Pushan Kumar Dutta, Abhishek Kumar, Ernesto D. R. Santibanez Gonzalez, Mohit Mittal, Sachin Kumar Gupta
19Application of Explainable Artificial Intelligence in Fintech
Raunak Kumar1, Priya Gupta2* and Bhawna2
1School of Engineering, Jawaharlal Nehru University, New Delhi, Delhi, India
2Atal Bihari Vajpayee School of Management and Entrepreneurship, Jawaharlal Nehru University, New Delhi, Delhi, India
Abstract
Rapid digitalization and technological advancements, including the adoption of artificial intelligence (AI), have significantly changed various domains, including finance. However, in highly regulated domains like finance, ensuring transparency and traceability of decisions for third parties is crucial. As a result, explainable AI (XAI) has emerged as a critical area of research. In this chapter, a systematic literature review is conducted by screening over 1000 articles from top finance, information systems, and computer science outlets. An overview of the current research on XAI in finance is provided, identifying 30 relevant articles that are classified based on the methods of XAI used and the goals they aim to achieve. The findings reveal that areas such as risk management, portfolio optimization, and applications related to the stock market have been extensively studied, while the research in anti-money laundering and other areas is limited in the context of XAI. Furthermore, the utilization of both transparent models and post hoc explainability methods has been observed by researchers, with a recent inclination toward the latter in finance. The current chapter aims ...
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