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Scooped by Huy Nguyen Trieu
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Artificial Intelligence: JP Morgan is showing the way...

Artificial Intelligence: JP Morgan is showing the way... | Disruptive Finance and Fintech | Scoop.it
In news more suited to the likes of Amazon, JP Morgan is set to look at customers’ spending histories in order to sell them future products or services.
Huy Nguyen Trieu's insight:

Artificial Intelligence in finance is a topic that raises a lot of interest. Although AI is predicted to change whole sectors in finance (from asset management to compliance), I've always thought that the first applications of AI in banks would be much less spectacular - but much more useful - and that would be the tried and tested recommendation engine a la Amazon

CBR and FT reported yesterday that JP Morgan is launching a smart system to assist their sales people and suggest trades to clients - in other words, a recommendation engine for the trading floor

This is a very welcome news - banks are finally using a technology that has been around for more than a decade and brings a real value to their clients. Of course, even if the technology is tried and tested, the main challenge will be to access, clean and aggregate customer and trade data that reside in dozens of different systems.

My guess is that we will start to see more and more banks applying similar technologies - not only because it's the normal evolution of the sales/client relationship, but also because they wouldn't want to see JP Morgan have a competitive edge...

I've been saying for years that the AI needs to come to banking through customer relationship and I'm glad JP Morgan is showing the way. Let's see who's next...

 

PS: coincidentally, we discussed this exact topic last week on Around Fintech in 80 days. If you want to learn Fintech, follow our fun experiment...

 

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What do finance professionals think of AI?

What do finance professionals think of AI? | Disruptive Finance and Fintech | Scoop.it

"AI and machine learning will undoubtedly alter both the headcount and the nature of skills required in the industry. A significant minority of survey respondents fear the effects on the workforce will be negative within the next few years. But wholesale displacement of humans is for the longer term – nearly seven in ten believe AI will bring complete or substantial change to their own jobs over the next 15 years. Even in trading, where automation is already widespread, human roles will remain critical in areas such as algorithm validation and monitoring, as well as compliance. At this point, few believe machine learning models can or should drive financial-market operations completely independently of human control...."

Huy Nguyen Trieu's insight:

A while ago, I wrote that AI and machine learning was more and more used in our daily lives - but that finance had so far failed to embrace these techniques. 

Euromoney Thought Leadership just published a very interesting report, where they surveyed 400 senior managers in finance and analysed their views about AI.

I was actually slightly suprised by the results: the majority of participants thought that the main impact would be on 1) trading strategies, 2) credit scoring and 3) compliance. For trading strategies and credit scoring, we could argue that this is business as usual - these businesses already are big users of algorithms, and AI/machine learning, etc will be just another tool to improve their models (although it introduces some ethical/regulatory issues because of the vast amount of data used). So it feels that it would be more incremental than a real game changer in my opinion.

On the other hand, tools such as recommendation engines a la Amazon (rumored to be reponsible for 1/3 of Amazon sales) would be much more disruptive in my opinion - since they have rarely been used before in finance.

In a world where proprietary trading and creating alpha is much more challenging, using AI to improve sales and customer relationship might be an easier strategy than optimizing trading strategies. 

 

PS : thanks to Tom Upchurch for the document

 

If you want updates on Disruptive Finance and Fintech:
– You can enter your email address to receive an email whenever I write a new post
– You can also follow me on Twitter here
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