Challenges of recommender systems in finance and banking: a systematic review

Abstract

Recommender systems are widely applied in various domains, including e-commerce, marketing, and education. Despite their popularity, recommender systems are not widely used in finance and banking. This paper aims to identify the challenges associated with using recommender systems in finance and banking and recommend directions for future research. Using a systematic literature review (SLR) method, 52 papers were selected and analyzed. A three-step process was used to make the selection. First, a keyword search was made to identify a seed list of sources. A snowball technique with specific inclusion and exclusion criteria was applied to expand the list. Finally, a quick study was made to produce the final list of sources to consider. Through the study of the 52 relevant papers, three main challenges: i) transparency, ethics, and data privacy; ii) handling complex content information and accounting for multiple user behaviors; and iii) explainability of AI models were identified. This study has established the barriers to adopting recommender systems in the finance and banking industry. Specific subjects of concern identified include cold-start problems, personalization, fraud detection, transparency, and data privacy. The study recommends further research leveraging advanced machine learning models and emerging technologies to fill the gap.