The Future of Behavioural Finance in an AI-Driven Trading World

Abstract

The rapid rise of artificial intelligence (AI) in financial markets, particularly through systematic and high-frequency trading, has transformed the landscape of modern finance. AI-driven algorithms dominate trading volumes on global exchanges, relying on vast amounts of data, computational power, and sophisticated models to exploit inefficiencies and capture short-term market movements. This shift has raised questions about the relevance of behavioural finance, which focuses on understanding how human psychology and cognitive biases influence market behaviour.

Keywords: behavioural finance, behavioural economics, AI trading