Generative AI-Based Finance Influencers: New Challenge in the World of Social Media

In recent years, social media has emerged as a powerful platform for disseminating financial advice and market insights. Finance influencers on social media, with their large following and trusted content, have gained significant influence over the investment decisions of their followers. However, the rise of generative AI has introduced a new challenge in this space. Generative AI allows influencers to create vast volumes of content that appears to be written by humans, despite being generated by algorithms. Yet, this content might have numerous issues, of which factual incorrectness is only one. This article explores the impact and challenges brought about by generative AI-based finance influencers.

Finance social media influencers, spanning areas such as stocks, commodities, and cryptocurrencies, have gained immense popularity in recent years. Their ability to convey complex financial information in a relatable manner has attracted a large following of eager investors seeking advice and commentary. Many investors rely heavily on the recommendations and insights provided by these influencers when making investment decisions. There are even websites that incorporate forecasts from multiple finance influencers to arrive at some average forecast values, with these values often marketed as the best industry predictions around.

Generative AI has opened up new curious possibilities for finance influencers and wannabe influencers. It is now possible to generate a high volume of content that mimics human-written material using generative AI models. These AI models have the capability to generate well-crafted sentences, mimicking the style and tone of human influencers. This technology enables social media accounts to produce a vast quantity of content quickly and efficiently, maintaining a consistent presence on social media platforms. Yet, this seemingly human-like content and the mass generation capacity it is being pushed with have created numerous issues for followers of social media accounts that dole out financial advice. Below we discuss the key issues among these.

While generative AI offers convenience and efficiency, it is inherently limited in terms of factual accuracy. AI models lack the ability to verify the accuracy of information before generating content. As a result, generative AI-based influencers may unintentionally (or intentionally in the cases of malicious actors or unscrupulous wannabe influencers) disseminate incorrect or misleading information, potentially leading their followers astray. The reliance on AI-generated content can compromise the integrity of financial advice and analysis posted by genuine finance influencers.

Generative AI-based influencers can inadvertently amplify alarmist messages and spread panic through social media platforms. These AI models have the ability to access vast amounts of information from the internet, including unreliable or false sources. If the AI-generated content is aligned with alarmist sentiments, it can rapidly spread fear and anxiety among investors, leading to unwarranted market reactions. Such scenarios can trigger financial panics, cause bank runs, and disrupt market stability.

Causing market distortions does not have to be done by stirring massive panic waves. Another challenge posed by generative AI-based finance influencers is the potential for market sentiment manipulation in subtler ways. By leveraging AI-generated content, these influencers can disseminate tailored messages that exploit the emotions and biases of their followers. The persuasive nature of AI-generated content, combined with its ability to target specific audience segments, makes it a potent tool for manipulating market sentiment and the prices of specifically chosen financial assets.

Generative AI-based finance influencers raise concerns regarding accountability and transparency. As AI algorithms generate the content, it becomes challenging to determine the source and authenticity of the information shared. Followers may find it difficult to discern whether the advice and analysis provided by these influencers are based on credible research or simply generated by AI algorithms. This lack of transparency can erode trust in the financial advice ecosystem and hinder informed decision-making.

The emergence of generative AI-based finance influencers presents a new challenge for investors and social media followers. These influencers introduce risks associated with factual accuracy, the amplification of alarmist messages, market sentiment manipulation, and a lack of accountability and transparency.

We do not imply that AI-generated financial advice is always wrong or manipulative. What happens is that unlike humans, the current generative AI technologies do not have a defined way of cross-verifying the information they are trained on. If trained on less than perfectly factual data, they might perpetuate and amplify falsehoods. Combined with the desire of some brazen “financial gurus” to amass followers using generative AI content, these technologies can do more harm than good to the overall financial ecosystem. This issue is now emerging as THE main challenge for anyone paying attention to financial advice on social media.

At ZENPULSAR, we are at the forefront of tackling this new industry challenge. Our social media analytics platform, PUMP, has built-in capabilities that identify bot and influencer content on social media. Our unique framework, based on a combination of up to 30 AI algorithms used within PUMP, has the ability to identify bot-driven AI content with a high degree of accuracy. If you rely on social media financial advice or sentiment tracking, PUMP might be your most effective protection against the AI-based financial influencers – social media accounts that dole out AI-generated financial advice left, right, and centre, while paying little to no attention to factuality, accountability, or the consequences of their actions.