Artificial intelligence ‘creeping into’ high-risk stock trading

Nearly three million people in the UK are using artificial intelligence (AI) tools when making financial decisions, with a worrying increase in those using it to trade on the stock market.

AI is becoming part of everyday life for many people, but as they get used to it helping them to manage finances, they are pushing the boundaries in how they apply the technology and taking serious financial risks.

According to research of 2,000 people by Broker Chooser, which matches up traders and brokers, around 22% of people are consulting AI for stock market forecasts.

The survey also found that around a third of those questioned have already used AI for money advice, with 54% of millennials and 47% of Gen Zs using the technology. In total, about 60% of those surveyed are either already using AI or would consider using it in the future.

It found that nearly 53% of those surveyed would act on guidance generated by AI tools, and 17% of millennials would choose AI over a human adviser.

The survey found that AI is still largely used for low-risk financial tasks, with 43% using it to find better savings rates, (38%) for budgeting and 33% for planning financial goals.

While AI is being widely adopted across the banking sector to automate services and offer tools to help people understand products, its use in stock trading by consumers is “high risk”, according to one banking professional who wished to remain anonymous.

“You don’t understand how it is making decisions because it is just pattern recognition,” he said. “It makes assumptions based on the data available.”

Adam Nasli, head broker analyst at BrokerChooser, said: “AI tools can be incredibly convenient for everyday financial tasks like budgeting or comparing savings accounts – but relying on them for stock picking or market forecasts, particularly in fast-moving markets like forex, carries significant risk.

 “These (AI) algorithms provide generic guidance based on historical data and patterns, but they cannot fully account for real-time market volatility, geopolitical events or your individual financial situation, risk tolerance and long-term objectives.

“AI is increasingly used for financial advice because it delivers instant, easily accessible answers to almost any question, which is particularly appealing to younger generations who often prioritise speed. For many, it also removes the anxiety of discussing personal finances, creating a space that feels judgement-free.”

But he warned: “When real money is at stake, AI should always be used to inform rather than decide, and consumers should always rely on trusted, regulated sources for financial guidance.”

This comes as UK prime minister Keir Starmer declared the government would go into battle with AI bots. The government said it will “shut a legal loophole and force all AI chatbot providers to abide by illegal content duties in the Online Safety Act or face the consequences of breaking the law.”

Technology secretary Liz Kendall said: “We will not wait to take the action families need, so we will tighten the rules on AI chatbots and we are laying the ground so we can act at pace on the results of the consultation on young people and social media.”