Source: Klement on Investing
Recent research shows LLMs exhibit systematic biases in financial decision-making that persist regardless of training data composition, suggesting the biases stem from model architecture itself rather than human-influenced datasets. Institutional investors evaluating AI-driven trading and advisory systems cannot simply clean the data and expect neutral outputs. Regulatory frameworks built on auditing training sets miss the structural problem. AI in finance may introduce systematic risks that humans never programmed in, creating opacity that traditional algorithmic trading did not.