Sarcouncil Journal of Multidisciplinary

Abstract: Generative AI is fundamentally reshaping the landscape of financial services by enabling unprecedented capabilities across critical operational domains. The evolution from narrow AI applications to sophisticated generative models marks a transformative shift in how financial institutions approach core functions. In fraud detection and anti-money laundering, these technologies enable advanced anomaly detection, synthetic scenario generation, and enhanced pattern recognition capabilities that transcend traditional rule-based systems. Compliance functions benefit through automated regulatory text analysis, report generation, and continuous monitoring systems that adapt to evolving requirements. Synthetic data creation addresses persistent modeling challenges by generating statistically representative datasets that preserve privacy while enabling more robust risk assessment. Successful implementation requires sophisticated governance frameworks addressing hallucination risks, ethical considerations, human oversight mechanisms, and architectural integration challenges. As financial institutions navigate this technological transition, balancing innovation with appropriate risk controls and regulatory alignment will determine the extent to which generative AI fulfills its transformative potential in creating more efficient, personalized financial services. Executive Summary this article examines the transformative impact of generative AI across the financial services industry, highlighting key applications that are redefining traditional practices. Financial institutions are leveraging these technologies to enhance fraud detection accuracy, streamline regulatory compliance, develop more comprehensive risk models, and deliver personalized customer experiences. Leading organizations like JPMorgan Chase have implemented LLM-based systems that reduce time spent on regulatory research by over 30%, while Mastercard has deployed generative AI solutions for real-time fraud detection that significantly reduce false positives. The article outlines implementation frameworks that balance innovation with necessary governance, presenting both technical approaches and organizational considerations essential for responsible adoption. Financial institutions that effectively integrate generative AI stand to gain significant competitive advantages through enhanced operational efficiency, improved risk management, and superior customer engagement.