Artificial intelligence reshaping finance: an analysis between predictive models, regulation and training

Artificial Intelligence (AI) is no longer just an emerging opportunity, but a transformative factor that is now pervasive in the global financial ecosystem. From risk management to algorithmic trading, portfolio customisation to cybersecurity, the adoption of AI in finance is increasingly broad, structured, and strategic. In this scenario, the financial sector is configured not only as an early adopter of technology, but as one of its greatest catalysts.

The driving force of AI lies in the combination of two key elements: the massive availability of data - so-called big data - and the exponential increase in computational capacity. Finance, by its very nature, lives on data, predictive scenarios, and complex decisions. In this context, AI is not simply an efficiency tool, but a cognitive amplifier that enables new analytical and decision-making depth.

AI as a strategic asset for the financial sector

Marco Giorgino, Director of the International Master in Financial Risk Management at POLIMI Graduate School of Management and Full Professor of Financial Markets and Institutions and Financial Risk Management at Politecnico di Milano, points out that “The world of finance does not look at AI as an innovation of the future, but is already immersed in it, albeit often in an inconsistent, fragmented, patchwork way.” According to Giorgino, AI technologies are spreading rapidly in financial institutions, while still not fully redefining operators’ strategies.

Looking to the future, however, the direction seems to be being mapped out, with an increasing pervasiveness of the use of AI in finance. Artificial intelligence should not be understood in opposition to human intelligence, but with a view to virtuous integration: “We must overcome the false dichotomy between human and artificial intelligence”, explains Giorgino. “The goal is not to replace the first with the second, but to build an increased intelligence.” In the banking and insurance world, this means rethinking internal processes and customer service models.

The history of AI is not recent: “We’re talking about a race that started decades ago. What we are seeing today is an acceleration driven by two factors: the availability of enormous quantities of data – even unstructured – and the computing power of machines, which are now much more accessible and less expensive.” Added to these are innovations in models, including deep learning, powered by increasingly sophisticated artificial neural networks.

A crucial step, for Giorgino, however, is represented by  generative AI: “The real frontier is an AI that doesn’t just classify or summarise existing content, but one which generates new content. This creative capacity brings with it opportunities but also risks and ethical questions.” Are there examples of application? These are numerous: “Today, a financial analyst can use AI to generate reports, market scenarios, and make investment recommendations. It is not a question of replacing the professional, but of freeing up cognitive resources from activities with low added value.” In this scenario, however, it is essential to focus on certain issues, which are, in many cases, still open: “Who is responsible if an algorithm makes a wrong decision? Who fed the model with distorted data? Who controls the transparency of the decision-making process?” explains Giorgino, highlighting the risks related to bias in datasets, the opacity of models, and the need for accountability in corporate boards. “Regulation is still incomplete”, he points out. The European AI Act is a first step, but we need consistent approaches between the US, Europe, Asia and other countries.”

Pending developments on this front, AI’s role in finance today spans five major areas: improving customer experience and engagement; optimising cybersecurity; advanced document processing; algorithmic trading; and risk management, with a focus on credit risk. “Today, even in credit, AI allows for advanced predictive analytics, using unconventional sources such as online research or social data to anticipate market trends,” Giorgino concludes.

The AI revolution in wealth management

Tommaso Migliore, CEO and Founder of MDOTM Ltd, leads a company that specialises in the vertical application of AI to finance. His perspective is practical and operational, having been developed in contact with banks, management companies, insurance companies and family offices. “AI enables us to scale what was previously impossible and to personalise investment choices across millions of portfolios,” Migliore points out, explaining how asset and wealth management is facing three major challenges: growing market complexity, evolving customer expectations, and the squeezing of margins. “We live in a globalised and hyperconnected world. Every company is now multinational, every risk is interdependent. In this present, understanding the dynamics of a stock means analysing multiple factors, starting with geopolitical scenarios.”

Alongside this, investors are increasingly demanding: “The personalised user experience we are accustomed to with Netflix or Amazon also creates expectations in the world of finance. But historically, finance has remained standardised. Until now, only large estates have had access to personalised advice.” Until now, exactly. Artificial intelligence is now breaking this pattern. “Through our Sphere platform, for example, we make it possible to analyse every portfolio as a human analyst would, but with a previously unthinkable capacity for scale”, explains Migliore. Our engine looks at millions of data points a day, produces predictive insights and generates personalised recommendations with explanatory capabilities.” 

The generative AI-based automated reporting part, in particular, allows for the construction of a structured and future-oriented ‘portfolio narrative’. “This is where real value is created,” Migliore concludes, underlining how, today more than ever, technology represents a survival factor in an industry with decreasing margins: “When revenues fall and complexity increases, the only sustainable response is technological innovation and, in our case, AI.”

Future-oriented education

Mauro Mancini, Associate Dean for Corporate Education at POLIMI Graduate School of Management, focuses on an often overlooked aspect of AI: education. “The adoption of artificial intelligence first requires a change in mentality. The problem is not technology, but the mindset of people,” Mancini explains, pointing out that 59% of large Italian companies have already started investing in AI, but still encounter significant obstacles, including “the absence of a structured methodology” and “the difficulty of keeping up with innovation.”

The global artificial intelligence market today exceeds $35 billion, with an annual increase of 90% worldwide. In 2024, growth in Italy was 58% compared to 2023. “These numbers tell us that AI is not a niche trend, but a strategic axis for the competitive future of companies to be approached, but with a specific focus on training.”

POLIMI Graduate School of Management responds to this challenge with a broad and comprehensive range of training. “The AI HUB is the heart of our ecosystem: we integrate AI into the MBA, Executive MBA, Specialising Masters, Short Courses, and Corporate Programmes”, explains Mancini. We also offer co-design courses customised for companies, with modules on envisioning, intensive training and industry verticals.”

Among POLIMI GSoM's valuable initiatives, a prominent role is played by the Corporate Education Community (CEC), which explores the use of AI in training, as well as by the Digital Management Academy, developed in partnership with the Observatories of Politecnico di Milano. “Together, we analyse technological trends, evaluate business needs, and build customised training paths in order to promote an aware and effective adoption of AI”, concludes Mancini. All of this takes place with one conviction: you cannot introduce new technology without a clear understanding of the starting point, the real needs, and the skills available. Education, today more than ever, is the bridge between innovation, its use, and the positive impact it can create for the benefit of society and organisations, in the finance sector and beyond.”