How can AI contribute to the evolution of the financial and capital markets in Brazil?

The number of Brazilian investors has evolved rapidly in recent years, but they still account for only 37% of the population, according to a 2024 survey conducted by Anbima (Brazilian Financial and Capital Markets Association).

Until recently, the main source of information on investments for the general public was the media. More in-depth analyses, which support the decision of whether or not to invest in a stock or financial asset of a given company, were available exclusively to professional investors. Today, banks, brokerage houses and analysis firms take their studies to a much wider audience.

Another important factor, which was recently observed, is the emergence of digital influencers, who have contributed significantly to the dissemination of an investment culture across Brazil. In this movement, the market learned how to respond quickly and innovated the offer. Therefore, ordinary investors can now access investment funds and securities previously restricted to institutional investors.

And from now on, what path should be taken for the market to continue advancing and explore its full development potential?

Artificial intelligence (AI) can play a major role here. It is already present in people's everyday lives, driving content from their internet searches and social media algorithms. But what about investments?

That's where the next wave of evolution may be, according to participants at Bridgewise AInvest 2024 – Brazil Edition, held at Arena B3 in May and jointly organized by the Israeli fintech Bridgewise and B3. “Technology linked to investment decisions and financial education is an increasingly relevant agenda. It is important to provide simpler, more accessible products, as well as quality data so that people can make better-informed decisions. Education and liquidity are two mantras for us. Furthermore, we believe that technology is an ally for the democratization of the market,” said Gilson Finkelsztain, B3 CEO, at the opening of the event. “We are entering a world where investment has no borders,” said Thiago Guedes, director of New Business at Bridgewise. 

Danilo Igliori, chief economist at Nomad, reinforced this view. “This means providing access to investments abroad to retail investors, the middle class, and technology is at the center of this process,” he stated.

To Marcelo Billi, head of Sustainability at Anbima, new technologies can empower investors, supporting both those who are just starting out and those who feel insecure to build a more robust and diversified portfolio, better understanding risk and return. They can also help bring different generations closer to the investment world. “For a traditional bank, like ours, the new technologies help to effectively communicat with generation Z,” said Leandro de Almeida, head of Business Development at Banco Safra.

How AI supports the analyst’s work

Thiago Guedes said that Bridgewise uses AI and technology to fill the knowledge gap between the market and the investor, providing a detailed picture of how much generative artificial intelligence has enhanced the analyst's work as it becomes increasingly complex due to the volume of data available. The traditional steps of breaking down a balance sheet, looking at an industry sector and talking to a company have multiplied with the offer of alternative data, which continue to grow exponentially.

XP's Research area, for example, uses AI to review and improve content analysis and begin simpler studies. As next steps, AI will be applied to account analysis, assessment models and visual presentations of data. “Today, there is a strong impact of robots on asset trading. In the United States, for example, more than 30% of the trading volume is done this way, but AI is still in its infancy in terms of fundamentalist analysis and has enormous room to grow,” said Fernando Ferreira, head of Research at XP.

Path of no return

To Juliana Nogueira, Guide Investimentos CEO, the use of AI makes the analyst's work more precise. “By crossing historical asset data, macroeconomic data and market trends, we can anticipate the behavior of sectors or certain stocks, bringing this information to our customers,” says Juliana.

Another aspect that can make all the difference, according to her, is that the AI tool makes it easier to customize strategies according to each customer's profile. “The challenge is to ensure that the data provided are secure, high quality and not biased or skewed,” Juliana adds.

The brokerage firm Ágora Investimentos has recently integrated AI into its products and it makes a continuous effort to seek knowledge about the possibilities of the tool while also valuing the role of analysts, which will continue to be essential for the investment ecosystem.

The same has happened to the brokerage firm Suno Investimentos. “Advances in technology will not replace human beings, but rather generate productivity for the team and convenience for customers,” points out Vitor Montezuma, Suno’s CFO.