AI Will Democratise Stock Market Analysis For Common Investors, Says Parth Nyati Of Tradingo

There are three major ways in which AI is being used to transform stock trading and brokerage platforms. Firstly, artificial intelligence helps in the analysis of potential investment opportunities. AI models capable of training to predict investment and trading possibilities could feed a wide range of market information, such as stock price history, financial news, worldwide events, etc.

Secondly, AI is being used for making better recommendations about how to so business on brokerage platforms by analyzing individual investment and trading patterns.

Additionally, broking platforms are using artificial intelligence for monitoring, fraud detection, and risk management.

In the current scenario, some investment managers are suggesting that AI can be used for stock market forecasting but there are no specific AI driven tools that are widely being used by retail investors. In order to help investors make investment decisions, it is estimated that several brokerage platforms would provide users with an NLP based interface on their websites.

This can save a tremendous amount of time for fund managers who can design AI models that can be used for stock market analysis. After training, the model can perform a day’s analysis in seconds with no compromise on accuracy. However, such models are primarily proprietary and cannot be made available to the general public. In the near future, if some of these AI models can also be accessed by common investors, I envisage a democratisation of such models.

At Tradingo, as a brokerage ourselves, we are the custodians of our customers’ personal and trade related data. We also have to make sure that our trading platform is not penetrable. Despite keeping all checks in place, we go through continuous rounds of vulnerability and penetration testing and security audits by approved auditors.

For stock brokers, SEBI has mandated the receipt of CERT+IN certification, for which every brokerage has to comply with rigorous procedures. Cyber security also needs to be taken into account by investors. There is a genuine risk of fraudulent activities on demat and trading accounts if an investor's email or phone account has been compromised.

Some fund managers claim to train AI models to provide more appropriate investment recommendations, but there has been no significant increase in their returns. For example, retail investors are not really given a simplified AI platform that allows them to make trades. No investment recommendations have been made by ChatGPT at this time.

Artificial intelligence can be applied to create factually inaccurate content, which could result in spreading unsubstantiated stories and leading to poor investment decisions. In addition, this can be risky because now AI does not take into account relevant aspects like Corporate Governance adequately while providing investment advice and the reliance on simplistic artificial intelligence for making investment decisions may be excessive. Instances of identity theft may also occur due to artificial intelligence.