Rights of investors in the context of algorithmic Artificial Intelligence technologies and automatization

Abstract

This study explores the profound impact of digital technologies on economic processes, particularly in the realm of investments. Financial organizations are leveraging digital platforms and algorithmic artificial intelligence (AI) to provide enhanced services to consumers. AI-powered algorithms surpass humans in processing vast amounts of information, leading to improved price discovery and reduced transaction costs. Robo-advisors, empowered by AI, have become pivotal players in financial markets, offering personalized investment portfolios based on risk profiles and objectives. While algorithmic AI technologies eliminate human errors and streamline decision-making, they also introduce new risks. Flaws in algorithm construction, intentional errors, cybersecurity vulnerabilities, and the regulatory challenges of supervising self-learning algorithms are concerns. Additionally, the rise of blockchain platforms has transformed cryptocurrencies and digital tokens into new tradable assets with their own protection challenges. Researchers emphasize that the wealth of data and correlations facilitated by AI can have unintended consequences, and the development of proper supervision and control mechanisms is vital. As the financial landscape continues to evolve, it becomes crucial for investors and regulators to navigate the complexities of digital technologies and address the emerging Global Technology Risk (GTR).