The intelligent finance ecosystem: AI applications in banking and fintech for enhanced decision-making

Abstract

The financial services sector is undergoing a significant transformation driven by artificial intelligence (AI), which is reshaping operational agility, real-time analytics, and intelligent decision-making. AI is being rapidly adopted across both traditional banks and fintech systems, offering substantial potential but also raising challenges related to equity, transparency, and regulatory compliance. This study evaluates the strategic role of AI across six major use cases: credit scoring, fraud detection, chatbot services, portfolio advisory, regulatory compliance, and decentralized finance (DeFi) smart contracts. A mixed-method approach, including literature review and simulated benchmarking with synthesized industry and academic data, was used. Key performance indicators such as accuracy, cost efficiency, and customer satisfaction were compared through weighted indices to analyze risk mitigation and operational impact. Results reveal that fraud detection achieves the highest AUROC (96.5%) and cost savings (23.5%), while chatbot services lead in customer satisfaction (89.6%). Regulatory compliance shows steady but moderate results, making it a suitable domain for automation and inclusion. DeFi smart contracts, however, perform poorly due to immature governance and integration. Overall, findings emphasize aligning AI potential with institutional readiness and domain needs. The paper proposes a framework for responsible AI adoption, stressing transparency, security, and ethical governance for future scalability.

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