Abstract: The research examines how Artificial Intelligence (AI) transforms financial services through its application to real-time risk assessment and automated decision-making. The industry transformation brought by AI enables faster decision-making processes while improving accuracy and reducing manual intervention to enhance risk management capabilities. Financial institutions achieve better financial operations accuracy and efficiency through the combination of machine learning (ML) and deep learning with real-time analytics to detect anomalies and prevent fraud and optimize credit risk assessments. The analysis focuses on streaming data processing and anomaly detection and event-driven risk mitigation systems as well as reinforcement learning function in developing adaptive risk models. The implementation of AI technology in finance creates multiple ethical and regulatory issues because it introduces bias while requiring transparent and fair decision-making processes. The article addresses these issues by explaining the need to create responsible AI systems which follow global regulations to maintain transparency and security and ensure accountability in financial decisions made with AI.