Monday, August 8, 2022

AI tries to analyze business behavior, but experts are cautious

New Delhi : The use of artificial intelligence (AI) is not new to stock-broking, but the rise of robot-advisory services is rapidly changing the landscape. While business experts are excited about the potential of advisory services using data analytics, they have been cautious.

For example, Bengaluru-based Anastra uses AI to analyze historical data and trading patterns to help traders make investment decisions. While Anastrat offers tips on ‘hold’ or ‘buy’ and diversify portfolios, others like Sharekhan Neo, Angel Broking ARQ or 5Pay Auto Investors use preset market strategies and trends to create automated investment plans and suggest ways to invest. Stock market.

Mohit Golecha, founder and chief technical officer, AnaStrat, said they have 110,000 clients with 35,000 daily active users in the two months since the launch of the “one-of-a-kind service”. He has partnered with four brokerages in India — Zerodha, Fyers, IIFL and Dhan देण्यासाठी to provide his services.

Bhumik Gada, a trader and financial advisor who works as a sub-broker for many brokerages and handles portfolios of more than 100 clients, said that if the platform could provide reliable analysis, it could be a valuable tool. “It is often difficult to follow every client’s trading pattern, which motivates traders like me to turn to analytics tools,” he added.

However, experts said that the effectiveness of the behavior analysis platform remains to be tested.

“One, there are no laws in India that tell consumers what would happen if a platform advised them to invest incorrectly. Importantly, these consulting firms do not regulate the Securities and Exchange Board of India and therefore do not provide binding investment advice to investors, “said Matthew Chacko, Founding Partner and Head, Technology, Media and Telecom Practice, Spice Root Legal.

Chacko said AI tools that analyze trading behavior to provide market information come under the robot advisory division and need to be regulated. “Analyzing data to predict future outcomes in volatile equity markets is a risk, which may not be particularly valuable for individual traders. Many factors influence the market every day, each of which fluctuates. It is important to have a good understanding of the risks, otherwise, they could be harmed, “he added.

Moin Ladha, a corporate and commercial practice partner at Khaitan & Co., said the lack of regulatory definitions in India for AI and automated tools could eventually lead SEBI to bring such services under its purview. “The way SEBI defines investment advisors and research analysts is very broad and if you offer any type of financial advice, you can easily come across SEBI regulations.”

Although robot-consultants in India are still at a new stage, such tools are gaining traction globally. For example, Polish firms are using Sigmoidal’s in-depth learning-driven investment strategy tool, or the Chicago, US-based Neurensic’s trade pattern analysis platform and Seattle-headquartered Kout’s K-Score data analysis and forecasting AI. User investment patterns.

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