This futuristic scenario is already becoming a reality for Indian investors. GenAI is different from traditional AI—it doesn’t just analyse data; it creates content like financial advice, market summaries, or personalised budgets instantly. India, now the fastest-growing market for ChatGPT, highlights how rapidly this tech is penetrating everyday financial decisions.
From fintech startups to traditional banks, Indian financial services are swiftly adopting GenAI. Take the app Jar, which automatically invests digital spare change into gold, simplifying micro-investing. Or the neobank Fi Money, whose chatbot answers complex queries about your expenses and savings in conversational language. Even Zerodha, India’s largest brokerage, actively experiments with AI internally, though it cautiously refrains from deploying it in customer-facing roles—reflecting both promise and prudence.
Why the excitement?
Hyper-personalisation is a key factor. GenAI can uniquely tailor financial advice based on an individual’s income, lifestyle, and goals—a luxury once reserved for wealthy clients of human advisors. This democratisation could significantly enhance financial literacy and access, vital in India where sophisticated financial advice often remains inaccessible or prohibitively expensive.
Additionally, GenAI offers unmatched efficiency. It processes enormous volumes of data in seconds, summarising annual reports or analysing market trends. For investors overwhelmed by complex market data, AI could become an indispensable research assistant, providing quick, digestible insights that human advisors might take hours to compile.
Yet, investors must approach this technology with eyes wide open. GenAI isn’t infallible—it occasionally “hallucinates”, confidently presenting incorrect or entirely fabricated data. Imagine trusting an AI-generated stock tip that turns out to be imaginary—a scenario that has occurred elsewhere. This underscores why a recent survey found 69% of investors cautious about relying solely on AI recommendations.
Data privacy is another critical concern. To provide personalised advice, AI apps require access to sensitive financial information. Even India’s finance ministry recently warned officials against using platforms like ChatGPT due to confidentiality risks. If government departments are cautious, individual investors should similarly think twice before freely sharing their permanent account number (PAN) or financial statements without stringent privacy assurances.
Algorithmic bias poses additional challenges. AI learns from historical data, often global in nature, potentially misaligned with India’s unique economic realities. An AI trained predominantly on international data could provide investment options irrelevant or unsuitable for Indian conditions, inadvertently skewing risk assessment and recommendations.
The regulatory environment adds another layer of complexity. India currently lacks specific regulations for AI-driven financial advice. If an AI app provides poor advice, investors have limited recourse compared to traditional, human-led advisory services regulated by bodies like the Securities and Exchange Board of India (Sebi).
Ex-Reserve Bank of India governor Shaktikanta Das recently highlighted AI’s “opacity” and its potential unpredictability, emphasising the urgent need for clear regulatory frameworks to safeguard consumers.
Ethical considerations also loom large. Who bears accountability if AI-generated advice causes financial harm? AI providers typically include disclaimers that shift responsibility to users, leaving them vulnerable. Transparency is equally essential—users deserve to know how recommendations are generated and whether hidden biases or commercial incentives influence AI outputs.
How should Indian investors navigate this landscape?
Firstly, treat GenAI as an assistant, not the final authority. Cross-check AI-generated advice with trusted financial portals or official data. If the AI suggests investing in a particular fund, independently verify its performance metrics before committing your money. Be selective about sharing personal data. Use reputable platforms with clear, stringent privacy policies, and avoid disclosing complete financial records or identifiers unless absolutely necessary.
Trust established institutions or widely recognised fintech startups rather than obscure new apps.
Moreover, stay informed about AI’s limitations. Understand that while AI can offer insights based on historical data, it cannot predict market fluctuations with certainty. Always rely on your judgment and experience, especially for high-stakes decisions.
GenAI undoubtedly has transformative potential, promising unprecedented personalisation, accessibility, and efficiency for Indian investors. Yet, this technology requires careful handling to mitigate risks related to accuracy, privacy, and ethics. As GenAI reshapes personal finance in India, the smartest move investors can make is to embrace it cautiously, balancing digital innovation with human oversight.
Simarjeet Singh is an assistant professor at Great Lakes Institute of Management, Gurugram, and Hardeep Singh Mundi is an assistant professor at Institute of Management Technology (IMT), Ghaziabad.
