As artificial intelligence (AI) becomes increasingly integral to finance, regulators face emerging challenges. Notably, Zerodha, a leading online trading platform in India, has embraced AI by offering users access to Anthropic’s Claude AI for portfolio management. This tool analyzes user holdings and provides rapid, informed responses to investment queries, enhancing decision-making efficiency. However, the rise of AI advisors raises concerns regarding compliance with regulations, investor privacy, and ethical considerations. The Securities and Exchange Board of India (Sebi) emphasizes that AI advisory tools must adhere to investment rules and safeguard user data. Despite AI’s potential benefits, including faster calculations, it is not infallible; it may misinterpret queries and operate outside ethical boundaries if not programmed correctly. Ensuring strict adherence to market regulations and user confidentiality is crucial for the legitimacy and safety of AI-driven financial advice. The future of AI in finance remains promising, provided these risks are properly managed.
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