FX: Why it’s bad to confuse AI with automation

Automation involves rule-based systems executing predefined actions. Artificial intelligence, however, enables machines to learn from data and make decisions autonomously – something that can feel like overkill when it comes to executing simple, repetitive tasks.

According to Eugene Markman, COO of Ion Markets (FX), the financial services industry has started using the term generative artificial intelligence (GenAI) interchangeably with large language models, machine-learning tools and sophisticated automated workflows.

“Marketing AI and automation interchangeably could lead to confusion and misalignment of technological investments and expectations as the distinct functionalities and applications are misrepresented,” he says.

Arjeta Haskaj, head of product strategy trading at Swissquote, also warns that treating automation as if it were AI can lead to inflated expectations regarding the sophistication and adaptability of trading systems.

“Maintaining a balanced investment strategy, allocating resources to both AI research and development and automation programmes, is the way to go,” she suggests. “This diversified approach ensures a more resilient technology implementation and reduces the risks associated with dependence on a single technology solution.”

Unrealistic expectations of the capabilities of automation systems could also lead to an over-reliance on automation and the possibility of increased risk exposure, says David Morrison, senior market analyst at Trade Nation.

“Then