An Emerging Topic in Finance: Use of Artificial Intelligence in the Field of Finance

Abstract

This study aims to provide readers with a simple and understandable introduction to the use of artificial intelligence technologies in the field of finance in different areas. In addition, this study also includes literature reviews in each section that includes the most important studies using traditional econometric methods and various artificial intelligence technologies. Even though the use of artificial intelligence technologies in the field of finance is diverse, the areas where it is mostly used in the world in general are credit assessment, bankruptcy prediction, stock market index and stock price prediction, optimal capital structure prediction and exchange rate prediction, which are also sections of this study. In this study, the main financial applications using artificial intelligence technologies are grouped under two main headings. These topics are financial forecasts and detection of financial crises, chaos and uncertainty in financial markets. Many factors are thought to be effective on the optimal capital structure. In this context, more studies need to be conducted in the world that address the capital structures and the factors that are thought to affect these structures in terms of clarifying the concept of optimal capital structure. It is important for both investors and researchers to increase the factors to be examined and also to include companies from different sectors in researches.  With the increase in such studies, it will be possible to obtain deeper information and to make more accurate comments concerning financing preferences of companies and also the consequences of these preferences Determining the optimal capital structure is actually extremely difficult as it involves a very complex decision-making process and a large number of interactive decision variables. In such a case, for example, an artificial neural network (ANN) can be developed as an artificial intelligence technology that can analyze and evaluate all financial information that has the possibility of affecting the decision-making process. When analyzing with artificial neural network (ANN), real data regarding different capital structures can be uploaded to the system. Thus, a debt/equity ratio can be determined to make the most accurate decision, and the company value can be maximized after this optimal capital structure decision.