Adoption of Artificial Intelligence in Risk Management Practices of Swedish Investment Funds and Corporations

Abstract

Fund managers and investment corporations have historically relied on established risk management techniques to guide their investment decisions. However, given the rapid improvements in Artificial Intelligence technology, it is uncertain whether risk management in the financial sector will follow suit. The purpose of this thesis was to determine whether Swedish investing corporations and funds are implementing AI into their risk management practices. In-depth interviews with four professionals from different financial institutions were conducted to gain insight into the present state and future possibilities of AI in the finance sector. The study discovered that, while there is notable interest in AI, the actual implementation is still in its early phases. Data quality, regulatory compliance, and the "black box" nature of AI models were recognized as significant challenges. Despite such obstacles, the potential benefits of AI, such as increased efficiency and more accurate risk assessments, point towards a promising future. While AI has not yet been widely utilized in risk management, the findings indicate that continued research and progressive integration may lead to more advanced and effective risk management practices in the Swedish financial sector.