Prabhakar Tiwari
Technology is changing economies as companies and industries adopt advanced solutions such as digital payments, online banking, and cashless transactions. Digital technology in the capital markets is changing the way market operates.
Indeed, technological advances in capital markets offer the opportunity to increase flexibility, scale efficiency, and reduce the complexity of how markets work. The effects of disruptive technologies on capital markets are as significant to cavemen as fire.
Well, the new technology-based solutions only increase human capacities in the capital market scenario. Machine learning and artificial intelligence are now part of financial institutions such as investment trading. The technology here is not a replacement for the human brain, but a tool to make it even smarter.
- Let’s look at a few ways that using various trading technologies in capital markets is making investors smarter:
- There are companies that offer their customers continuous compliance risk assessment by combining machine learning technology with high-speed and big data processing power. This happens when an AI platform enables the identification of complex trading patterns on a large scale across multiple markets – in real time.
- Finance professionals now have the ability to search financial data, access notes, market insights and trending companies in real time with speech recognition and natural language processing technology. This saves time for traders as they don’t have to go through every single note or conversation.
- At the push of a button, investors also receive top stock recommendations for every day. Pattern recognition technology and a price prediction engine process various sets of data to obtain a stock ranking rating.
- Technology continues to democratize trade. Investors no longer have to rely on experts as data science develops trading strategies that can be used to solve investment problems. Some companies even offer end-to-end machine learning, data science, and AI and software development for businesses – including the commercial sector.
- The companies are also building a trading ecosystem by bringing AI and the trading community together where they can increase their profits by scanning markets to find optimal trading opportunities.
- Some companies have deployed robo-advisor platforms that place dozens of investment algorithms in a million trading scenarios overnight to increase alpha likelihood. The next day, only those strategies are shared with traders who have a success rate of 60% and more.
In short, it is time for industry leaders to take advantage of these new age technologies that will continue to transform the capital markets ecosystem for years to come. Data and analyzes are among the most important factors for technology-driven changes in the capital markets. At the same time, advances in machine learning and artificial intelligence enable abnormal market risk prediction, events, and market abuse detection. Hence, the way forward is to take technology and apply it in creative ways to develop the markets. (Prabhakar Tiwari is Chief Growth Officer at Angel Broking. The views are his own.)
