Artificial Intelligence in Finance: Innovation, Inequality, and Ethical Frontiers

Abstract

This paper explores how Artificial Intelligence (AI) is reshaping the investment management industry, focusing on both its exciting potential and the ethical questions it raises. It starts by briefly exploring the origins of AI and introduces key ideas like supervised and unsupervised learning, showing how these technologies have become essential tools in financial analysis. Next, the discussion shifts to practical examples, highlighting how AI helps analysts, portfolio managers, and traders do their jobs more efficiently while enabling investment firms to offer personalized, data-driven advice to their clients. The paper uses BlackRock’s Aladdin platform as a real-world illustration of how leading firms strategically adopt AI. However, alongside these innovations come important concerns about job displacement, biases hidden within algorithms, threats to data privacy, and uneven access to powerful AI systems. To address these challenges, the paper proposes a clear ethical framework that emphasizes strong governance, transparency, and thoughtful regulation. Ultimately, it argues that responsibly integrating AI into finance requires an approach that balances innovation with fairness, ensuring that technological advances benefit everyone rather than deepening existing inequalities or compromising trust.