The Transformational Impact of AI Innovation on Financial Sectors in the Industry 5.0 Era

Abstract

This research article examines the impact of artificial intelligence (AI) innovation on financial sectors in the Industry 5.0 era. Industry 5.0 refers to the ongoing automation and data exchange trends in manufacturing technologies and processes, enabled by cyber-physical systems, internet of things (IoT), cloud computing, cognitive computing, and AI. The financial sector is undergoing rapid digital transformation and adopting these advanced technologies to improve operations, risk management, customer service, data analysis, trading, advisory services, and more. The objective of this article is to analyze key AI applications in banking, investment, insurance, and other financial domains and their benefits as well as potential risks. The methodology involves a detailed review of scholarly articles, industry whitepapers, and expert analyses on AI in finance. The findings suggest that while AI innovation has many positive impacts like faster service, improved predictions, and better risk assessment, there are also concerns around potential job losses, systemic risks, data privacy, and regulatory uncertainty that need to be addressed for responsible and ethical deployment of these powerful technologies. Overall, the research highlights that with prudent governance, AI can usher great efficiencies, personalization, and sustainable growth in financial sectors, thereby accelerating the Industry 5.0 evolution.