IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2503.22035.html
   My bibliography  Save this paper

The Limits of AI in Financial Services

Author

Listed:
  • Isabella Loaiza
  • Roberto Rigobon

Abstract

AI is transforming industries, raising concerns about job displacement and decision making reliability. AI, as a universal approximation function, excels in data driven tasks but struggles with small datasets, subjective probabilities, and contexts requiring human judgment, relationships, and ethics.The EPOCH framework highlights five irreplaceable human capabilities: Empathy, Presence, Opinion, Creativity, and Hope. These attributes are vital in financial services for trust, inclusion, innovation, and consumer experience. Although AI improves efficiency in risk management and compliance, it will not eliminate jobs but redefine them, similar to how ATMs reshaped bank tellers' roles. The challenge is ensuring professionals adapt, leveraging AI's strengths while preserving essential human capabilities.

Suggested Citation

  • Isabella Loaiza & Roberto Rigobon, 2025. "The Limits of AI in Financial Services," Papers 2503.22035, arXiv.org.
    • Handle: RePEc:arx:papers:2503.22035
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2503.22035
    File Function: Latest version
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2503.22035. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.