AI Tools to Have Most Influence In Future Trading


The finance industry already has one of the highest adoption rates for AI and ML. Now, there is addition interest due to new technologies like generative AI.

Artificial intelligence tools are expected to be the most influential technology in the future for trading, according to JPMorgan’s e-Trading survey, which polled 835 institutional traders and found that AI was far ahead of other emerging technologies in importance. 

The finance industry has one of the highest adoption rates across all sectors for artificial intelligence and machine learning, however, there seems to be a new flow of interest in these technologies with the launch of OpenAI’s ChatGPT and other generative systems, as AI has skyrocketed in importance among institutional traders. 

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In JPMorgan’s 2022 survey, mobile trading applications and blockchain were considered of equal importance to AI and machine learning, at 29 percent for mobile trading apps and 25 percent for blockchain and AI. In 2023, AI and machine learning are far ahead with a 53 percent share of importance, while blockchain and mobile trading applications dropped far behind with 12 percent and seven percent. 

While not specifically mentioned as the reason for the sudden rise in interest, the potential capabilities of generative systems in providing historical financial data, analysis, risk, and other metrics could be utilized by traders to make more informed decisions. While consumer apps such as ChatGPT do not allow this, as they have been trained on data from before 2021, the potential for a tool which ingests real-time data and provides conversational style analytics is now a possibility. 

Whether that comes from OpenAI or another provider, we will have to wait and see. OpenAI has certainly taken the limelight with the launch of DALL-E and ChatGPT to the wider public, which has sent Alphabet and Meta into “code red” management mode, with entire teams being diverted to thinking of ways to commercialize their own AI efforts. 

One of the issues, at least for smaller firms, is how to go about building a chatbot at the same level of sophistication as ChatGPT. OpenAI has allied itself heavily to Microsoft – recently announcing a $10 billion investment and most likely a discounted rate to use Microsoft’s Azure cloud servers – in part because of the high costs to run and maintain its GPT model. 

In the survey, API integration was also considered to be a technology of importance to 14 percent of traders. Natural language processing and quantum computing were both of lower importance to most traders, with only seven percent of traders ranking them in their top three important emerging technologies for the next three years. 

“We continue to see strong momentum towards electronic trading, as seen by 100 percent of survey respondents predicting an increase in electronic trading over the coming years,” said Scott Wacker, global head of FICC e-sales. “We’re seeing a lot of new entrants in the fixed income market which is really pushing the electronic agenda for the whole industry. It’s an exciting time for the electronic and automation space right now.”

David Curry

About David Curry

David is a technology writer with several years experience covering all aspects of IoT, from technology to networks to security.

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