Robert Shiller1, a Nobel laureate in economics, concludes that: "Predatory algorithms are designed to find the weak point of human psychology, to devour savings before regulators realize what happened."
Prof. Nouriel Roubini2, known for predicting the 2008 global crisis, emphasizes that: “Artificial Intelligence in finance is a double-edged sword: it can increase efficiency, but in the hands of ‘sharks’ it becomes a tool to manipulate human behavior and hide systemic risks through predatory algorithms”. High and fast profits serve as an irresistible digital “bait”. Our concern grows because financial markets are experiencing a dangerous paradox: while innovation promises to democratize investment, it is sharpening the teeth of a new predatory species operating in the shadows.
Today, market "sharks" no longer hide behind fine-print contracts or luxurious offices, but behind sophisticated algorithms and Artificial Intelligence (AI) that devour the savings of citizens without knowledge of euphoric investments at breakneck speed.
In this new reality, the risk has increased exponentially because AI is being misused to create:
(i) information asymmetry;
(ii) (to exploit the significant lack of financial education and +
(iii) to exploit our psychological weaknesses.
The scale of this fraud is now a global financial pandemic with staggering figures. An estimated $1.6 trillion is lost each year to financial fraud worldwide.
These are not just statistics; they represent the sweat and toil of millions of families. The average loss for an individual in these schemes ranges from $10,000 to $50,000, figures that often represent a lifetime's savings.
The most severe cost remains the psychological costs of “post-trauma.” Studies show that up to 70% of victims suffer severe psychological trauma, chronic anxiety, and depression.
"Financial sharks" do not just steal money, they destroy lives. For us Albanians, this danger carries a heavy historical shadow that should never be forgotten. The tragedy of 1997 remains the world's largest and most tragic case of oversight failing and greed feeding on ignorance.
With 50% of GDP, 60% of the population affected, and nearly 3,000 lives lost, this case should serve as a permanent warning in every country, underdeveloped, but also for every developed country.
Today, the algorithm is yesterday's "given word," but with the power of Artificial Intelligence to identify financial bubbles before regulators react.
In this battle between pervasive technology and consumer protection, the role of supervisory authorities is vital.
Supervision must be: (i) professional; (ii) proactive and (iii) above all incorruptible. It is no longer enough to control traditional banks alone; a new standard of “algorithmic transparency” must be applied. Every investment platform, private credit fund or “Shadow Banking” entity that seeks to attract public capital must be supervised step by step and in real time, with clear preventive effects by all institutions responsible for protecting financial and banking markets, in a coordinated manner.
These include: the Bank of Albania, the Financial Supervisory Authority, the Financial Intelligence Authority, the State Intelligence Service (with a focus on national security from financial fraud), as well as the State Police through the structures of the fight against economic crime and financial fraud.
The number of victims can be reduced, however slightly, by following some practical advice based on painful international stories in which our country also played a part.
First, before transferring your savings to any platform or investment fund, also consult these security filters such as:
(i) Is the company registered and licensed by the Bank of Albania or the Financial Supervisory Authority;
(ii) If the profit seems guaranteed and significantly higher than the market, it is almost always a fraudulent scheme;
(iii) when the answer is “secret algorithms”, “complex crypto trading” or “methods that not everyone can understand”, this is a red flag that you are being ripped off.
Second – Digital fraudsters often use “lock-in periods” to keep capital locked up in the scheme long enough for them to disappear. Avoid platforms that only exist on WhatsApp, Telegram, or an “offshore” address on remote islands.
Third – Are you being pressured to invest “now or never” because the opportunity will close? Scammers use urgency to prevent you from thinking rationally. It is advisable to wait 48 hours before investing in any tempting offer.
Fourth – If you are asked to bring friends to increase the reward, the scam will go bankrupt. Beware of false positives because they are often created by the algorithms themselves. Today 2/3 of coding is no longer done by coders, but by artificial intelligence itself.
Fifth – Every investment should be accompanied by a detailed contract explaining the risks and if you feel unsure it is better to lose an “opportunity” than to lose your life savings. You should not trust a real or digital person who has no guarantee of the money you trust and they steal from you.
Raghuram Rajan3 emphasizes that: “The greatest danger of our era is its use to create information asymmetry where the sharks see everything, while small investors are blind.”
Therefore, the best and cheapest protection remains the financial education of the citizen.
We must cultivate a rational doubt: high profit without risk is a digital myth that does not exist.
Specialized oversight against "predatory sharks" should start by forcing them to make their algorithms easily observable.
It's the same as asking every company in the real economy to file its production technology scheme with customs and taxes, to facilitate rapid control and prevent abuses.
The digital marketing algorithms of every company must be made transparent. Artificial Intelligence must not be allowed to become a tool of devouring, but must be put at the service of transparency and security. Preventive financial education is our only defense in a “financial ocean”: bigger, deeper filled with digital “sharks” whose bites are painful to the point of survival.
1 Robert J. Shiller is a Nobel Prize-winning economist, professor at Yale University, and author known for his analyses of financial market volatility.
2 Nouriel Roubini (Dr. Curse). is one of the most well-known economists in the world. He gained international fame when in 2006 he warned the IMF about the 2008 crisis
3 Raghuram Rajan is a prominent Indian economist, Chicago Booth Professor and former Governor of the Reserve Bank of India, known worldwide for predicting the 2008 financial crisis.
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