The Impact of Harnessing Generative AI on Financial Modeling: An Analysis of Risks, Ethical Imperatives and Organizational Transformation

Abstract

The non-technical implications of implementing Generative AI (GenAI) in the context of financial
modeling were examined in this research by means of a qualitative multi-case study. The research
explored related risks, ethical obligations, and changes organisations had in place by systematically
reviewing public filings, reports, and disclosures. The results revealed an evolutionary riskemergence
path from operational to strategic and system risks. It also disclosed that the values of
accountability, transparency, and fairness are practically operationalised as significant risk
reduction mechanisms rather than purely theoretical concepts. As a result, achieving such integration
requires deep organizational change, such as workforce re-skilling and new governance frameworks.
It is argued that GenAI engagement is first and foremost a strategic organizational challenge, rather
than a technologically demanding one, which implies managing its nuanced consequences. This paper
provides context for financial regulators, risk managers, and corporate strategists who are
responsible for managing technological adoption.