3 Impactful Use Cases of AI in Capital Market

Nov 28, 2017, 10:03:00 PM

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The AI impact on capital markets has never been profound as it is in the present times. AI has certainly taken the finance world, especially banking and investment services by storm. Artificial Intelligence is a suite that comprises of a set of tools- like machine learning, natural language processing, deep neural networks etc. that are impacting almost every industry, in the most efficient way.

“According to a survey by Gartner, banking and investment services are actively investing in machine learning and virtual customer assistants, as compared to other industries.” Click to Tweet

Evolution of AI in Capital Markets

At its core, AI is essentially a set of technologies that are meant to augment or perform human tasks, without their intervention. Over a few decades, these technologies have evolved to sense, learn, comprehend, and act.

Such a progression now enable systems and software to acquire, identify, recognize, and analyze database (both structured and unstructured), derive insights, envision the process, and then put them into the real-time use cases. In context to capital market, AI is enabling the machines to do algorithmic trading, qualitative analysis, automate trade execution, manage risk, and a lot more.

What turns AI set a disruption in almost every industry is its decision making ability, which is based on cognitive learning. In contrast to perpetuating up on the programmed responses, AI overcome the limitations, complexities, and challenges by teaching the system to learn through past experiences.

AI Use Cases in Capital Markets

While we are still in the era where real AI is a near future, there are few use cases of the technology that’s enabling the industry to have its benefits. Amongst the mature and active applications of AI technologies in capital market, these three mentioned below are the most prominent ones.

  1. Augmented Decision-Making

In the capital markets industry, AI is enabling financial advisors and firms make informed decisions, consider new strategies, and ultimately render outcomes that offer a level playing field to the clients and businesses. For every next-best-action, management systems derive the recommendations for financial advisors by analyzing customer portfolio, continuous transactions, and handle risks in unexpected scenarios.

  1. Process Automation

Interpreting unstructured inputs, analyzing the human behaviour pattern, and learning to respond without explicit coding has been the biggest advantage of AI. Software applications are smartly handling high complexity tasks, adapt to changes and expectations, augmenting jobs like fraud detection, sales, trading processes and all of that with cognitive capabilities being the basis. Such a convenience offered by automation is not only assisting in the back-office tasks but also increasing the overall efficiency by making human intelligence available for better, consumer-facing decisions.

  1. Personalized Financial Planning

Capital markets have been making the most of digital assistants, to render better service interaction and transform sales. For enhanced interaction with the clients, virtual assistants offer conversational interface that rely upon a number of AI technologies (like Machine Learning, Language Processing). AI then understands the intent of the user and make real time responses on the basis of algorithms.

Getting Started with your Fintech Solution 

Human brain is known to learn through its past experiences. In case of AI, this experience and potential to learn comes through data and algorithms designed for certain processes. Therefore, data is counted as one of the major enablers of AI, along with intelligent algorithm development and ability to integrate the technology on different platforms (desktop software, mobile apps, web applications etc).

Once you determine the availability of these AI enablers, you can start building AI solutions for the consumers or for the firm itself. The next step is to collaborate with a technology partner that can share their expertise for custom capital markets software development services, powered by AI. 

For any inquiry or help or discussion about your software idea or development, we have our free 30 minutes consultation for you.

Kunwar Jolly

Written by Kunwar Jolly

Digital Consultant at Daffodil Software, Kunwar is an avid reader, tech enthusiast and generally keeps abreast on latest developments in the technology space and their future outlay.