The Application of Machine Learning in Finance: Situation and Challenges
Bibliographic record
Abstract
Since its development in the 1950s, machine learning (ML) has rapidly evolved from a theoretical concept into a practical tool, finding wide application in key areas of the financial industry, including market forecasting, risk management, and investment strategy optimization. In recent years, deep learning (DL), a significant branch of ML, has gained a prominent position in the financial sector due to its superior performance in handling complex data and executing financial tasks. This paper reviews the major applications of ML and DL in the financial domain, analyzing their technical advantages, challenges, and future development trends. Key areas of application include market trend prediction, credit risk assessment, quantitative investment, and fraud detection. At the same time, issues such as the complexity of ML models, data privacy, and model interpretability continue to pose challenges for its widespread adoption in the financial industry. In the future, with further technological innovations and cross-domain integration (e.g., quantum computing and blockchain), ML is expected to bring about significant transformations in the financial sector.
Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.
How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.008 | 0.013 |
| Meta-epidemiology (narrow) | 0.001 | 0.001 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.002 | 0.003 |
| Science and technology studies | 0.001 | 0.004 |
| Scholarly communication | 0.005 | 0.010 |
| Open science | 0.002 | 0.002 |
| Research integrity | 0.006 | 0.007 |
| Insufficient payload (model declined to judge) | 0.003 | 0.002 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".