According to a report by Philstar Biz , artificial intelligence is driving a transformative wave across financial markets and the broader economy. The article, titled "Five-layer cake," uses a layered metaphor to describe how AI's impact unfolds in stages, from algorithmic trading to economic forecasting.
The first layer represents AI's role in automating trading strategies, improving efficiency and liquidity in stock markets. Subsequent layers delve into risk management, where machine learning models assess credit and market risks more accurately than traditional tools. The third layer extends to sectoral shifts, as AI reshapes industries like banking, insurance, and fintech.
On a macroeconomic level, the fourth and fifth layers involve AI-driven policy analysis and long-term economic planning. The report emphasizes that while AI offers substantial benefits, it also introduces risks such as algorithmic bias and market volatility. Overall, the "five-layer cake" framework aims to help policymakers and investors understand the multi-tiered influence of AI on the global economy.