Examining the Role of AI in Detecting Fraudulent Activities, Managing Financial Risks, and Enhancing Decision-making in Investment Strategies

This study investigates the applicability of AI in improving financial risks, regulatory compliance, and anomalies in financial operations within the banks in the Punjab and Sindh provinces of Pakistan. It examine to what extent the newly developed technologies using AI, mainly machine learning algorithms and predictive analytics, can be of help to risk managers, compliance officers, and internal auditors to do their job properly. A quantitative methodology was adopted and relied on a sample of 160 professionals from around Punjab and Sindh, risk managers and compliance officers, and internal auditors from financial institutions. Statistical techniques in the form of regression analysis, correlation analysis, and ANOVA were applied to relate AI adoption and enhancements in risk management and sound compliance practices.