Massachusetts Securities Regulator Begins Investigation Of The Use Of Artificial Intelligence By Investment Companies

JAKARTA - Massachusetts's top securities regulator, State Secretary Bill Galvin, has opened investigations into investment firms' ways of using artificial intelligence in their interaction with investors in the state. He said the reason was concerns about the growth of this technology and its uncontrolled potential use.

On Thursday, August 3, Bill Galvin announced that his office had sent a letter requesting information to a number of companies that use or develop artificial intelligence for their businesses, including JPMorgan Chase and Morgan Stanley.

Other companies receiving letters include Trader Brokerage, US Tiger Securities, E*Traded, Savvy Advisors, and Hearsay Systems, according to a Galvin spokesman.

The use of artificial intelligence (AI) in investment companies has grown rapidly in recent years.

Data Analysis: Investment companies use artificial intelligence to analyze data quickly and accurately. AI can process large amounts of data from various sources, including news, financial reports, and market data, to identify relevant trends and patterns.

Market Prediction: AI is used to predict market movement and stock performance. By leveraging a statistical modeling algorithm, AI can help investors make decisions based on historical data and market trends.

Investment Personalization: Several investment companies use AI to provide personalized investment recommendations for each client. AI can analyze the client's risk profile and investment preferences to offer a suitable portfolio.

Algorithm trading: AI is used in a complex algorithm trading system. This algorithm allows investment companies to make transactions automatically based on certain parameters, such as price and stock volume.

Risk Management: AI is used to manage investment risk by identifying potential risks and monitoring portfolios in real-time. With rapid analysis, AI can help reduce investment risk.

Fraud detection: Investment companies use AI to detect suspicious activity and potential fraud. AI can analyze suspicious behavior patterns and provide early warning.

Customer Service: Some investment companies use AI to improve customer service. AI can provide quick and accurate answers to client questions and help solve problems more efficiently.