AI-Powered Cybersecurity a New Frontier for Risk Management in Finance Domain
DOI:
https://doi.org/10.63282/3050-922X.ICRCEDA25-101Keywords:
Artificial Intelligence, Cybersecurity, Financial Risk Management, Fraud Detection, Regulatory ComplianceAbstract
The financial sector is a prime target for cyber threats due to its extensive digital footprint, sensitive customer data, and high-value transactions. With the evolution of cyber threats, traditional security measures such as rule-based detection systems and firewalls have proven inadequate in mitigating sophisticated cyberattacks. The integration of Artificial Intelligence (AI) in cybersecurity has opened new frontiers in risk management, offering proactive threat detection, real-time fraud prevention, and adaptive defense mechanisms. AI-powered solutions leverage machine learning (ML), deep learning (DL), and natural language processing (NLP) to analyze vast amounts of data, recognize anomalies, and respond to threats autonomously. This research paper explores the transformative role of AI in cybersecurity risk management within the financial domain, examining its applications in fraud detection, intrusion prevention, anti-money laundering (AML), and regulatory compliance. We analyze AI-driven cybersecurity frameworks, their advantages over conventional security solutions, and the challenges associated with their deployment. The study includes an in-depth review of recent IEEE-cited literature between 2013 and 2022, highlighting real-world case studies from leading financial institutions and fintech organizations. Furthermore, this paper discusses the ethical, regulatory, and technical challenges that financial firms face in adopting AI for cybersecurity. Issues such as data privacy concerns, adversarial AI attacks, interpretability of AI models, and regulatory compliance are addressed. The research also investigates the role of explainable AI (XAI), federated learning, and blockchain-based security frameworks in strengthening AI-driven risk management solutions. By leveraging AI in cybersecurity, financial institutions can enhance threat intelligence, automate risk assessment, and improve incident response times. However, a comprehensive strategy involving collaborative AI governance, regulatory oversight, and continuous technological advancements is essential to maximize AI’s potential while mitigating risks
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