Surabaya, East Java – Artificial Intelligence (AI) has extended its reach far beyond the realms of technology and healthcare. The world of investment, too, is now inseparable from the sophistication of algorithms.
From data analysis to executing stock trades in milliseconds, AI has fundamentally transformed the face of capital markets. Yet behind its promises of efficiency and precision lies the hidden risk of unseen traps.
"In the past, investing was considered something only for the wealthy. But the key isn’t in having a high income—it’s about managing your finances wisely," said Haryanto Tanuwijaya, a Management Lecturer at Universitas Dinamika (UNDIKA), on Sunday (April 20, 2025).
As an academic frequently invited to financial seminars, Haryanto has witnessed firsthand how AI, robo-advisors, and blockchain technology are quietly reshaping traditional investment methods. Decisions once driven by intuition and experience are now increasingly based on massive data analytics.
The human role in stock selection is beginning to fade. AI can scan millions of data points in an instant—from market trends and social media sentiment to company financial reports. With High-Frequency Trading (HFT), stock transactions can occur in milliseconds, chasing profits from even the smallest price differences.
"AI can read the market faster than humans. But speed doesn’t always mean accuracy," he added.
AI’s Failures Amid Crisis
No matter how advanced, no technology is immune to errors—especially in uncharted territory. The COVID-19 pandemic served as a stark example. Many AI-based predictive systems failed to anticipate the crisis’s impact due to a lack of relevant historical data.
"If the input is wrong, the output will be wrong. That’s an absolute rule in IT: garbage in, garbage out," Haryanto said.
AI vulnerabilities stem not only from internal flaws but also external threats. Overly reactive algorithms can trigger market turmoil when provoked by false information. The 2010 flash crash serves as proof: the Dow Jones index plunged over 1,000 points within minutes due to AI’s overreaction to faulty data.
Robo-Advisors: Convenient, But Lacking Intuition
Haryanto also highlighted the rise of robo-advisors featured in apps like Bibit, Ajaib, or Wealthfront, which offer an easy path for beginner investors. With just a few clicks, portfolios are automatically built according to one’s risk profile.
"The problem is, they’re still robots. They don’t have intuition, nor can they read political shifts or human emotional states," he emphasized.
AI might advise selling during a market panic, when in fact it may be the best time to buy. Algorithmic decisions often overlook the social and psychological contexts that heavily influence market movements.
Blockchain: Innovation Meets Risk
Meanwhile, blockchain technology offers fresh air through its decentralized systems. Transactions become more secure, transparent, and efficient. Even assets like real estate or artwork can now be tokenized.
However, the world of Decentralized Finance (DeFi) also comes with substantial risks—from extreme price volatility to minimal oversight that opens doors for fraud.
Although AI continues to evolve, human capabilities remain irreplaceable. Not everything in investing can be measured by numbers. That’s why Haryanto believes true success comes from the courage to endure and long-term conviction—things that can’t be coded into algorithms.
"The most important trait in investing isn’t intelligence—it’s character," Haryanto quoted, echoing the legendary investor Warren Buffett.
Collaboration, Not Competition
Instead of competing with AI, Haryanto encourages a collaborative approach. Technology should serve as a partner—to accelerate analysis and broaden insights.
Ultimately, decisions must stay in human hands, guided by intuition, ethics, and sound investment principles: diversification, discipline, and patience.
"AI has logic. But only humans have wisdom," he concluded.