Evaluating the Transformative Influence of Artificial Intelligence–Driven Systems on Investor Behaviour and Decision-Making Dynamics in Financial Markets

Abstract

The increasing adoption of Artificial Intelligence (AI)–based systems in financial markets has brought notable changes in how investors perceive information and make investment decisions. This study investigates the extent to which AI-driven tools—such as automated advisory services, algorithmic trading mechanisms, and data-driven forecasting models—shape investor behaviour and influence decision-making patterns. The research follows a descriptive-cum-analytical design, enabling a structured examination of behavioural responses associated with the use of AI technologies. The study is primarily based on primary data, collected through a well-structured questionnaire administered to a sample of 200 investors, comprising retail participants and individuals with moderate market experience. A convenience sampling method was adopted to select respondents who actively engage with digital investment platforms. Supporting insights were also drawn from relevant secondary sources, including academic literature and industry reports. To analyze the data, techniques such as frequency distribution, correlation analysis, and multiple regression were employed using statistical software (e.g., SPSS). The reliability of the measurement scale was verified through Cronbach’s alpha, while factor analysis was conducted to identify key dimensions influencing investor behaviour in an AI-enabled environment. The results indicate that AI-based systems contribute to improved efficiency in information processing, assist in minimizing behavioural biases, and enhance the overall quality of investment decisions. At the same time, the findings suggest a growing tendency among investors to depend heavily on automated recommendations, which may limit independent judgment. In conclusion, the study highlights that AI-driven technologies play a significant role in modernizing investment practices by promoting more informed and timely decision-making. However, it also emphasizes the importance of maintaining a balance between technological reliance and human insight to ensure responsible and effective investment behaviour in the evolving financial landscape.