In the last decade or so, there have been significant technological advancements globally and the hurricane pandemic that struck us in 2020 just helped increase or in fact double the momentum. Earlier, Robotics, Artificial Intelligence (AI), Machine Learning were just some interesting and exciting concepts that we had heard of but now, it is the most talked about across every sector. Of course, not to forget ChatGPT that created quite a stir in the market.
How has this happened?
- Advanced Computing
- Availability of large amounts of data
- Breakthroughs in algorithms and techniques…
….and much more.
I used to always read about how different sectors have adapted to AI in their systems and processes and wondered how the capital markets business would adapt to such revolutionary ideas, new technologies, regulations and market conditions.
With these new technologies, there is a lot that has changed, especially in the last few years.
- Improved informed investment decision-making.
- Enhanced risk management.
- Generated data insights.
- Optimized trading strategies.
- Detecting anomalies in trading avenues & booking patterns.
- Predict market volatility.
- Identify potential market crashes based on real-time feed.
- Fraud detection.
- Anti-money laundering patterns.
- Systemic monitoring of trade life cycle.
- Real-time cross-border jurisdiction compliance.
- Infrastructure innovation supporting trading services.
As per a recent PwC report, the industry outlook in 2024 across the various capital markets sub-sectors – investment banking, wealth management, securities services and market infrastructure, indicates that there will be an evolution of new business models. It is therefore imperative for organizations to increase their ability to be agile and innovative to stay relevant and competitive.
I believe Generative AI is going to be the most influential trend in 2024 for financial services. Whether it is introducing new wealth management tools or reshaping customer experience, the financial services sector will be at the helm of managing the lasting impact AI will have on organizations and people.
Leveraging technology is great; however, in no way is AI a replacement for human judgement and expertise. New innovations or use of AI to improve efficiency, accuracy and returns while reducing risks and costs will need to be steered by human capital. What do you think?
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