Generative AI is making it cheaper and easier to build algorithmic trading systems, but industry experts warn the trend could produce a generation of “shallow quants,” exacerbate “explainability” gaps, and expose markets to regulatory blind spots. With algorithmic strategies now driving 70% of equity derivatives turnover on the NSE in FY25 and the global algo trading market set to hit $ 23.48 billion this year, the risks are drawing fresh scrutiny.

The debate sharpened at a recent QuantInsti webinar on The Future of AI in Quant Trading.

Some flagged serious concerns around explainability. Dimitri Bianco, founder of Fancy Quant, said transparency is non-negotiable. “Explainability is the core of finance. Without it, you’re not doing quant finance—it’s just gambling,” he said, warning of L

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