Many senior executives from financial institutions and fintech companies see AI as a tool that will help improve financial institutions’ risk management, for example through more in-depth assessment of risk in portfolios and more incisive, comprehensive and informed credit-risk assessment. In these applications, AI promises not reckless speed or loss of control, but rather an unprecedented depth and breadth of insight, and the ability to act on information and learn from its actions.
However many experts also acknowledge a degree of risk surrounding the use of AI.
But regulators do not anticipate rules specific to AI to be written anytime soon.
Within trading and investment management, firms such as Aidiya and Sentient Technologies are pioneering AI trading programmes. They employ a combination of machine learning techniques and evolutionary algorithms to crunch huge amounts of data, in order to recognise obscure patterns, which others have not identified.
Over the next three years, the most dramatic changes will be felt in the areas of trading, financial analysis and IT, according to 64%, 60% and 60% of respondents respectively. Large numbers also expect machine learning to materially affect risk assessment (59%), credit assessment (57%) and investment portfolio management (52%). Risk assessment and financial research are the areas where companies are most likely to experiment with machine learning applications in the next three years.
The survey data yielded many interesting findings and insights into how AI technology is being introduced, managed and perceived by executives from around the world. Here you can find some of the other interesting findings of the survey.
Most of our survey respondents are cautiously optimistic about AI’s future role in financial markets. The optimism derives from the recognition of the great opportunity that awaits successful applications. However, like with all technology, it will largely depend on how it is wielded that will ultimately determine the risk and reward.