• Dr. D. Rajashekar

In the evolving landscape of the digital economy, Artificial Intelligence (AI) has emerged as a transformative force in the financial services sector across the globe. From algorithmic trading and credit scoring to fraud detection and robo-advisory services, AI is revolutionizing the way financial institutions operate and interact with customers. This paper critically examines the multifaceted role of AI in reshaping global financial markets, emphasizing both opportunities and associated risks. The study explores how AI-driven tools enhance efficiency, accuracy, and customer engagement in banking, insurance, and capital markets. Through global case studies from developed (e.g., USA, UK) and emerging economies (e.g., India, Brazil), the paper highlights how AI is boosting operational resilience and financial inclusion. However, the integration of AI also brings forth several challenges, including algorithmic bias, data privacy concerns, cybersecurity risks, and job displacements. By adopting a qualitative and comparative research methodology, this paper analyses regulatory frameworks, ethical dilemmas, and policy responses from key financial economies. Special attention is given to the Reserve Bank of India's (RBI) approach toward AI governance in FinTech and digital banking. The paper concludes with strategic policy suggestions for governments, regulators, and corporate decision-makers on ensuring inclusive, ethical, and secure AI adoption in financial ecosystems. This work contributes to the ongoing dialogue on sustainable digital transformation, aiming to align AI innovations with global economic stability and equitable growth.

Digital Economy, AI innovations, Global financial markets, Emerging economies

"AI IN GLOBAL FINANCE: INNOVATIONS, RISKS, AND POLICY PATHWAYS FOR SUSTAINABLE DIGITAL TRANSFORMATION", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.12, Issue 8, page no.125-130, August-2025, Available :http://www.jetir.org/papers/JETIRHC06016.pdf

"AI IN GLOBAL FINANCE: INNOVATIONS, RISKS, AND POLICY PATHWAYS FOR SUSTAINABLE DIGITAL TRANSFORMATION", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.12, Issue 8, page no. pp125-130, August-2025, Available at : http://www.jetir.org/papers/JETIRHC06016.pdf