The AI Book

CHAPTER 45AI and Capital Markets: Where to Now?

By Karan Jain¹

¹Head of Technology, Europe and Americas, Westpac Banking Corporation

Artificial intelligence (AI) and machine learning (ML) have numerous key roles to play in the future of the capital markets: combating eroding margins; structuring for the realities of customer loyalty to the best price and speed of execution; minimizing the costs of complying with increasing regulation (the reality now is that it is more common today for businesses to decide on whether to restructure to meet regulatory requirements or to shut a portion of the business down completely); living up to changing customer expectations; and dealing with the realities of the organization’s narrowing bottom line.

These factors constitute a series of triggers for big changes to ways business is done. Look deeper and we see that big change is also coming from industry: the data collected by car manufacturers like Land Rover, Tesla and BMW are impacting how commodities are priced in completely new ways, and beyond the direct control of capital markets players.

The priority to deepen relationships – or create them in the first place – through cross-selling assets is being enabled by AI. So, an accelerating advancement in technology and its application generally can be viewed as a threat to the capital markets status quo, although the pace of change – and despite the hype – has positive benefits to yield for businesses of all sizes. This chapter aims to cut ...