Evaluating the Role of Conversational AI in Financial Investment Decision Making in NCR

Abstract

The increasing adoption of artificial intelligence (AI) in financial services has transformed how investors seek advice, manage portfolios, and make decisions. Among the most disruptive innovations is conversational AI, which includes chatbots, robo-advisors, and virtual assistants capable of real-time dialogue and personalized guidance. In India’s National Capital Region (NCR), a rapidly expanding hub of financial activity, conversational AI tools are increasingly shaping investment decisions across diverse investor groups. However, challenges remain regarding trust, data security, and the ability of conversational AI to deliver unbiased, high-quality recommendations. This study evaluates the role of conversational AI in financial investment decision-making in NCR by integrating insights from behavioral finance, technology adoption models, and AI governance frameworks. Using a mixed-method approach, the paper draws on existing regulatory provisions, secondary survey data, and cross-country comparisons to assess how investors perceive and adopt conversational AI tools. The analysis highlights factors such as trust, financial literacy, perceived risk, and personalization, which significantly influence adoption levels. Findings indicate that while conversational AI improves accessibility, reduces information asymmetry, and fosters investor confidence, it also raises ethical concerns around algorithmic bias, transparency, and accountability. Adoption in NCR remains uneven, with younger and digitally literate investors showing higher trust in AI-driven recommendations, while risk-averse groups remain hesitant. The study proposes a conceptual model linking trust, financial literacy, and risk perception to AI adoption and investment confidence, supported by empirical insights. The paper contributes to both academic discourse and practical policymaking by suggesting regulatory frameworks, corporate adoption strategies, and design improvements for conversational AI in finance.