Algorithmic Trust and Transparency: The Role of Generative AI in Shaping Investor Confidence in Brokerage Services

Abstract

The article examines how generative AI can be incorporated into brokerage services and how these activities will result in investor confidence and openness. The financial sector is slowly but steadily turning to AI technologies to focus decision-making measures. Algorithmic trading has become a huge trend that is gaining popularity, and AI technologies will play a major role in transforming it. The study addresses the issue of transparency in trading systems and investor confidence by examining the role of AI in enhancing it, an area that has been overlooked due to its significance in AI and financial services. A mixed-methods study was used to gather data in the form of brokerage firms (utilizing generative AI, investor surveys, and the case studies of successful AI applications). The most important discoveries are that AI-powered transparency increases the level of trust and contributes to greater activity among the investors. The research highlights challenges that companies in the brokerage area must address, including the importance of ethical AI use and addressing investor skepticism. The article provides practical recommendations for brokerage firms on utilizing AI for building trust while complying with industry regulations.