The accelerating advancement of Artificial Intelligence (AI) is reshaping investment decision-making across financial institutions. This article examines the dual role of AI as both an enabler of opportunities and a source of new risks in asset management, portfolio construction, and risk evaluation. By applying techniques such as machine learning, natural language processing, and predictive analytics, firms are able to extract value from extensive datasets, identify emerging market signals, and execute strategies with greater precision. These capabilities promise improved efficiency, competitive advantages, and potentially higher returns. However, their adoption also raises pressing challenges, including algorithmic bias, vulnerabilities to cyberattacks, regulatory ambiguities, and excessive reliance on automated systems. The study emphasizes the need for balancing human expertise with AI-driven insights, ensuring interpretability, accountability, and ethical use. Drawing on empirical studies and industry cases, the paper concludes that AI is not a replacement for human judgment but a complementary tool that requires strong oversight, robust governance, and evolving regulatory frameworks to unlock its full potential.
Sangisetti et al. (Sat,) studied this question.
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