The Role of Artificial Intelligence in Strategic Business Decision Making
DOI:
https://doi.org/10.61808/jsrt203Keywords:
AI, Investment Decision-Making, ML, Risk Management, Financial InstitutionsAbstract
Artificial Intelligence (AI) is transforming investment decision-making in financial institutions by leveraging machine
learning, natural language processing, and predictive analytics. These technologies enable rapid processing of vast
datasets, accurate market forecasting, and tailored investment strategies, leading to enhanced returns and operational
efficiencies. AI-driven tools analyze market data, sentiment, and alternative sources to uncover insights, optimize
portfolios, and improve risk management, offering a competitive edge in volatile markets. However, challenges such as
algorithmic biases, which can perpetuate unfair outcomes, cybersecurity vulnerabilities that threaten sensitive data,
and regulatory complexities due to opaque AI models require robust oversight. This paper explores AI’s opportunities,
including cost reduction and personalized services, alongside risks like over-reliance on automation and ethical
concerns. Through case studies on hedge funds, robo-advisors, and high-frequency trading, we assess AI’s impact,
emphasizing the need for human-AI collaboration to ensure ethical decision-making. We also examine future trends,
such as sustainable investing and quantum computing, which promise to further reshape finance. Data analysis
highlights AI’s potential and pitfalls, providing recommendations for responsible adoption, including transparency,
staff training, and regulatory engagement, to balance innovation with accountability.