AI-Powered Market Risk Models: Transforming the Future of Financial Analytics
DOI:
https://doi.org/10.63282/3050-9262.IJAIDSML-V5I1P106Keywords:
AI in Market Risk Modeling, Machine Learning for Financial Risk, AI Driven Risk Analytics, Predictive Modeling in Finance, Quantitative Risk Management AI, Market Volatility Forecasting AIAbstract
Artificial Intelligence (AI) has emerged as a transformative technology in financial analytics, with significant implications for market risk management. Traditional models, such as Value at Risk (VaR) and stress testing, have been essential in risk assessment but exhibit limitations in adapting to the rapidly evolving financial landscape. AI-powered market risk models address these shortcomings by leveraging advanced machine learning (ML) and deep learning (DL) techniques to process vast datasets, detect complex patterns, and provide real-time insights. These models not only enhance prediction accuracy but also improve the scalability and adaptability of financial systems. However, their adoption poses challenges, including model explainability, regulatory compliance, and ethical concerns. This paper explores the integration of AI into market risk analytics, emphasizing its potential to revolutionize financial decision-making while addressing the associated risks. Case studies of successful AI implementations are discussed, highlighting the balance between innovation and regulation
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