Fintech & AI Glossary

A large language model (LLM) is a type of artificial intelligence trained on vast text data to understand, generate, and…

Retrieval-Augmented Generation (RAG) is an AI architecture that combines information retrieval with text generation. Ins…

A vector database is a specialized database system designed to store, index, and query vector embeddings — numerical rep…

An embedding is a numerical vector representation of data — text, images, or other content — generated by an AI model. E…

AI inference is the process of running a trained machine learning model on new input data to produce predictions, classi…

A context window is the maximum number of tokens — both input and output — that an AI model can process in a single inte…

Fine-tuning is a machine learning technique where a pre-trained model is further trained on a smaller, task-specific dat…

Prompt engineering is the practice of designing, refining, and optimizing input prompts to AI models to produce desired …

AI hallucination is a phenomenon where an AI model generates content that is factually incorrect, nonsensical, or not gr…

Anti-Money Laundering (AML) refers to the comprehensive set of laws, regulations, and procedures designed to prevent cri…

Know Your Customer (KYC) is the mandatory process by which financial institutions verify the identity of their clients a…

AI data residency refers to the requirement that data used for AI processing — including training data, inference inputs…

Semantic search is an AI-powered search technique that understands the meaning and intent behind search queries rather t…

Tokens are the fundamental units of text that AI language models process. Text is broken into tokens — which can be word…

Data governance is the comprehensive framework of policies, processes, roles, and technologies that ensures an organizat…

The General Data Protection Regulation (GDPR) is the European Union's comprehensive data privacy and security law that g…

Chunking is the process of dividing large documents into smaller, semantically meaningful segments before embedding and …

ETL (Extract, Transform, Load) is a data integration process that extracts data from source systems, transforms it into …

Model Risk Management (MRM) is the comprehensive framework of policies, procedures, and controls that financial institut…

A data warehouse is a centralized repository designed to store, manage, and analyze large volumes of structured data fro…

Transformer architecture is a deep learning model design introduced in the 2017 paper 'Attention Is All You Need.' Unlik…

The attention mechanism is a neural network component that enables models to dynamically focus on the most relevant part…

A neural network is a computing system inspired by biological neural networks in the human brain. It consists of layers …

Deep learning is a subset of machine learning that uses neural networks with multiple hidden layers (deep neural network…

Machine learning (ML) is a subset of artificial intelligence that enables systems to automatically learn and improve fro…

Few-shot learning is a machine learning technique where a model performs a new task after being shown only a small numbe…

Zero-shot learning refers to an AI model's ability to perform tasks it was never explicitly trained on, without being sh…

Chain-of-thought (CoT) reasoning is a prompting technique that elicits step-by-step reasoning from AI models before they…

An AI agent is an autonomous software system that perceives its environment, makes decisions, and takes actions to achie…

An MCP Server implements the Model Context Protocol, an open standard that enables AI models to securely access external…

AI orchestration is the coordination and management of multiple AI components, tools, and services to execute complex wo…

Temperature is a parameter in AI language models that controls the randomness of output generation. It ranges from 0 to …

Tokenization in AI is the process of breaking text into smaller units called tokens — typically words, subwords, or char…

Grounding in AI refers to the practice of basing model outputs on verifiable, external sources rather than relying solel…

RAG evaluation is the process of measuring the quality and effectiveness of retrieval-augmented generation systems. It a…

Multimodal AI refers to AI models that can process and generate multiple types of data — text, images, audio, video, and…

Constitutional AI is an AI training and alignment approach developed by Anthropic that uses a set of principles (a const…

An open-source LLM is a large language model whose weights, architecture, and often training code are publicly available…

On-premise AI deployment refers to installing and running AI models on an organization's own hardware and infrastructure…

A reasoning model is an AI model optimized for multi-step logical reasoning and problem-solving, typically using chain-o…

A data lake is a centralized repository that stores vast amounts of raw data in its native format until needed. Unlike d…

A lakehouse is a modern data architecture that combines the flexibility of a data lake with the reliability and performa…

A data pipeline is a set of automated processes that move and transform data from source systems to destination systems …

Streaming data is data that is generated continuously by multiple sources and sent incrementally for processing in real-…

Data lineage is the process of tracking and visualizing the flow of data as it moves from source systems through transfo…

A data catalog is a metadata management tool that creates an inventory of all data assets within an organization, making…

Cosine similarity is a mathematical metric used to measure the similarity between two vectors in a multi-dimensional spa…

Approximate Nearest Neighbor (ANN) is a search algorithm that finds items in a high-dimensional space that are approxima…

HNSW (Hierarchical Navigable Small World) is a state-of-the-art algorithm for approximate nearest neighbor search that b…

OLAP (Online Analytical Processing) is a computing approach that enables fast, interactive analysis of multidimensional …

Basel III is a comprehensive set of international banking regulations developed by the Basel Committee on Banking Superv…

The EU AI Act is a landmark European Union regulation that establishes a comprehensive legal framework for artificial in…

PCI DSS (Payment Card Industry Data Security Standard) is a set of security standards designed to ensure that all compan…

SOC 2 is a framework for auditing and reporting on service organizations' controls related to security, availability, pr…

DORA (Digital Operational Resilience Act) is a European Union regulation that establishes a comprehensive framework for …

RegTech, short for Regulatory Technology, refers to the use of technology, particularly AI and machine learning, to stre…

SR 11-7 is a supervisory guidance issued by the Federal Reserve and the Office of the Comptroller of the Currency (OCC) …

The Financial Action Task Force (FATF) is an intergovernmental organization that sets international standards for combat…

Explainable AI (XAI) refers to methods and techniques in artificial intelligence that make the outputs and decisions of …

AI governance is the framework of policies, processes, and controls that organizations establish to ensure their AI syst…