Bridgewise, a tech firm based in Israel, has received clearance from the Israeli Securities Authority (ISA) to deploy an AI-driven chatbot for providing stock market recommendations. The initiative is in collaboration with Israel Discount Bank, with an anticipated launch later this month.
AI's Growing Influence in Financial Advising
Named Stocktalk, the chatbot caters to the growing need for quick and comprehensive financial data among traders. Executive Vice President at Discount Bank, Asaf Pasternak, noted that nearly all of their clients opt for digital advice over traditional methods, favoring frequent updates on their investments.
Stocktalk integrates three primary models: two that handle language processing for data extraction and interaction, and another focused on stock evaluation. These elements work together to offer users insights into company profiles, analyze financial records, and make stock trading recommendations based on current market circumstances.
Regulatory Conditions and Expansion Plans
While approved, the chatbot must adhere to regulations, which include restrictions against providing individualized advice. Bridgewise plans to enhance its services with projections, earnings reports, and customized investment strategies. In addition, there are plans to integrate the chatbot with another bank's investment platform in Israel.
The approval process faced skepticism from financial regulators, who worry about potential market disruptions. Gary Gensler, chairman of the US Securities and Exchange Commission, told The Register that unchecked AI could lead to market instability, especially if dependence on similar models leads to collective trading behavior.
AI Hallucinations and Sector Insights
“AI hallucinations,” a phenomenon in which AI produces creative yet sometimes inaccurate results, is becoming a topic of interest. NTT Data has argued that these could foster new creativity in business sectors.
Established in 2019, Bridgewise employs AI that draws from historical patterns and current news to offer investment insights to financial entities including Nasdaq and the Tel Aviv Stock Exchange. The chatbot has undergone extensive development and testing to ensure its recommendations are reliable.
Users can interact with Stocktalk to gain insights on numerous stocks, such as deciding on Alphabet Inc. shares or evaluating semiconductor stocks. During beta testing, a Bloomberg reporter asked the bot to suggest the top stocks to invest in, and it provided a swift response with reasoning for each suggestion.
