ARTIFICIAL INTELLIGENCE AND FINTECH IN INVESTMENT MANAGEMENT: EMERGING TRENDS AND CHALLENGES
DOI:
https://doi.org/10.64751/Keywords:
Artificial Intelligence; FinTech; Investment Management; Robo-Advisors; Algorithmic Trading; Portfolio Optimization; Risk Management; etcAbstract
FinTech combined with Artificial Intelligence (AI) has transformed the field of investment management and is improving efficiency, accuracy, and accessibility. This paper discusses the emerging opportunities and challenges in the areas between AI and FinTech, how they can be applied to deal with portfolio optimization and management as well as risk management and robo-advisory services. A literature and data insights research on the industry find that AI-based models can increase forecasting accuracy by up to 30 percent, and that robo-advisory platforms are expected to manage trillions of dollars in assets world-wide in the next 5-10 years. The findings are also characterized by the growing use of AI by institutional investors as over 90 percent of asset managers indicated their current or intent to use the AI. Nonetheless, there still is the challenge of algorithmic bias, transparency, regulatory uncertainty, and scanty practical use relative to declared intentions. The implications of the findings are that the future of investment management depends on the hybrid model that emerges describing the spiral relationship between human expertise and AI-empowered analytics that are supported by robust governance and flexible regulatory processes. The study may be useful in informing the relevance of AI and FinTech to transformation in financial services and to the importance of ethically transparent deployment
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