Machine Learning and AI for Risk Management

We explore how machine learning and artificial intelligence (AI) solutions are transforming risk management. A non-technical overview is first given of the main machine learning and AI techniques of benefit to risk managementRisk management. Then a review is provided, using current practice and empirical evidence, of the application of these techniques to the risk management fields of credit risk, market risk, operational risk, and complianceCompliance (‘RegTech’). We conclude with some thoughts on current limitations and views on how the field is likely to develop in the short- to medium-term. Overall, we present an optimistic picture of the role of machine learningMachine learning and AIArtificial intelligence (AI) in risk management, but note some practical limitations around suitable data management policies, transparency, and lack of necessary skillsets within firms.

# Artificial Intelligence Applications # Computer Science # Risk Management in Financial Firms # Business, Management and Accounting # Impact of AI and Big Data on Business and Society # Decision Sciences

Saqib Aziz, Michael Dowling (2018). "Machine Learning and AI for Risk Management". Palgrave studies in digital business & enabling technologies. https://doi.org/10.1007/978-3-030-02330-0_3