Report time: 10:00 am on Monday, April 24, 2023

Report Title: Artistic Intelligence Analysis and Individual Investor Activities: Imperial Evidence from Mutual Fund Investment

Location: Main Building 418

Rapporteur: Tong Siliang, Assistant Professor of Nanyang Technological University

Introduction to report content:Many retail investment platforms have introduced artificial intelligence (AI) analysts to help individual investors gather insights and evaluate investment products. Yet, there is scant empirical effort examining the business impact of such an AI tool on individual investors' financial market investments. To fill this gap, we collaborate with Ant Fortune (an affiliate of Alibaba), the largest retail investment platform in China, and explore a unique dataset wherein an AI analyst was introduced to facilitate individual investors’ investment activity. Our analyses provide the first empirical evidence showing that individual investors who use the AI analyst perform more manual investment sessions and invest more than those who do not use the AI tool. Interestingly, our further analyses document both positive and negative effects across heterogeneous investor groups. Specifically, we demonstrate that, on the one hand, the use of an AI analyst could drive more investment activity from individual investors who lack adequate financial knowledge, indicating a positive financial inclusion effect. On the other hand, we find that AI analyst use reduces investment activity from investors who are less familiar with financial technology, suggesting a negative resistance effect of AI applications. More importantly, using an AI analyst alters investors’ risk tolerance, increasing their investment in products carrying increased volatility. Despite the positive effects of using AI analysts for investment returns, information overload causes lower returns for investors with less finance knowledge. Our results help platform managers understand whether and how they should implement AI analysts to promote individual investors’ standing in financial markets.

Reported by:

Assistant Professor Tong Siliang joined the Department of Information Technology and Operation Management of Nanyang University of Technology and Business in 2021, and received a doctor's degree in marketing from Fox College of Business of Temple University in 2020. Dr. Tong is an empirical researcher, whose main research fields involve artificial intelligence, mobile application marketing and Sharing economy. His research results have been rated as the best paper at AMA conferences, ISMS Marketing Science, and others. Currently, research has been published in the Strategic Management Journal, Marketing Science, Journal of Marketing, Journal of the Academy of Marketing Science. Before entering the academic world, Dr. Tong had six years of management experience in digital marketing and network analysis, and received an MBA degree from the University of Wisconsin–Madison in 2016.

(Undertaken by: Department of Management Engineering, Research and Academic Exchange Center)