Artificial Intelligence in FinTech: Enhancing Investment Decisions and Financial Market Efficiency

Abstract

This research explores how Artificial Intelligence (AI) can support stock market investment decisions and contribute to financial market efficiency in stock markets. The study assesses the effectiveness of AI techniques such as Neural Networks, Random Forest, and Support Vector Machine in forecasting stock prices based on historical prices, volume, and sentiment data. It demonstrates that AI models have a higher performance, flexibility, and speed compared to conventional models, leading to more accurate and informed investment strategies. Beyond predictive capabilities, the research underscores the role of AI in enhancing financial market efficiency through increased liquidity, decreased volatility, and faster price adjustments facilitated by real-time market data analysis and algorithmic trading strategies. The study also highlights the role of sentiment analysis in improving investment decision-making with the inclusion of market dynamics and external factors. However, the study also points out potential issues regarding privacy, bias, and regulatory considerations, which highlight the importance of ethical integration of AI in financial markets..