AI in the financial world: How safe are public investment tools?

AI in the financial world: How safe are public investment tools?

Artificial intelligence (AI) has increasingly found its way into the financial world in recent years and is changing both the everyday lives of investors and the way financial service providers work. The use of AI makes it possible to evaluate large amounts of data and simplify processes, allowing quick decisions to be made about investments. Loud tagesschau.de Asset managers like Acatis use AI to select suitable stocks for funds and compare companies within an industry to make investment recommendations.

The automation and acceleration of processes in the financial industry is another advantage that AI brings. Intelligent algorithms react lightning-fast to economic signals and trade on the stock market in milliseconds. AI also helps improve creditworthiness checks, optimizes risk management and increases the effectiveness of fraud detection. Platforms such as WhoFinance have already developed chat bots that conduct initial discussions with customers, but final advice is left to human investment advisors.

Be careful when using AI tools

Despite the many benefits that AI offers, private investors should be cautious. AI is unable to predict the future and cannot guarantee any stock market prices. The European Securities and Markets Authority (ESMA) also warns of the risks that can arise from the use of public AI tools and apps in the area of ​​financial investments. This warning was published at the end of March 2025 and is specifically aimed at consumers who want to use such tools for their investment decisions, such as DLA Piper reported.

ESMA points out that public AI tools do not fall under the investor-protecting behavioral and organizational obligations that regulated investment service providers must comply with. Therefore, there are significant risks for investors who rely solely on these tools, as recommendations from publicly available AI applications can be tempting but misleading. Investors also have no option to seek the help of an ombudsman or dispute resolution process if they have problems with these tools.

Expert recommendations

Experts recommend using AI where it actually brings benefits, but the final investment decisions should still be made by humans. It is advisable not to enter personal data into public AI tools and be aware that they are not authorized to provide investment services. Investors should therefore rely on sound company analysis and view the use of AI as a supporting tool, not as a sole solution for their financial decisions.