Applications and issues of artificial intelligence in the financial sector

This paper investigates the application of artificial intelligence in the financial sector, analyzing the existing technical, ethical, and legal issues, and proposing corresponding solutions. The research background highlights the widespread use of AI technology in the financial industry and the efficiency and cost benefits it brings. The research focuses on challenges related to data quality, feature engineering, model complexity, real-time capability, computational resources, and data privacy protection. The research method includes literature review and case analysis, revealing the applications of AI technology in stock prediction, risk management, trading strategy optimization, and customer service. The results indicate that effective data cleaning, automated feature engineering, model simplification and regularization techniques, the use of interpretability tools like LIME and SHAP, and the introduction of fairness evaluation standards can significantly enhance AI model performance and transparency. The conclusion points out that these measures can not only solve the current technical and ethical issues of AI in the financial sector but also promote the widespread application and standardization of AI technology in other fields.