Artificial intelligence or AI is an integral part of almost all sectors. In fact, the technology is expected to drive future prospects of the tech world. However, the technology may have some knock-on effects on the financial industry.
“A future financial crisis could be sparked because everything was relying on one base level, what’s called generative AI level, and a bunch of fintech apps are built on top of it,” informs Gary Gensler, Chair, Securities and Exchange Commission.
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Many fintech experts have seconded Gary’s opinion. Along with leveraging the benefits of AI, it is critical to ensure the technology is used in a positive manner.
Modern digital security and commerce are built on encryption, which enables users to conduct countless daily tasks that most people take for granted, such as online banking, e-commerce, chatting, and many more, safely and securely. It is feasible that AI may someday be engaged in breaching encryption and destroying confidence on the internet permanently. However, it is merely a probability for the future.
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Besides other computer trading systems, AI-driven trading algorithms are susceptible to faults or mistakes . If not adequately recognized and managed, these mistakes might result in incorrect trading choices.