With advisors and broker-dealers growing their use of artificial intelligence, sparking warnings about transparency from the SEC, what about its use in other parts of the investment ecosystem?
A new report highlights increasing usage and interest in AI from buy-side equity trading desks with asset managers seeing the potential for improved performance and productivity through high-speed technology in their processes.
The Crisil Coalition Greenwich study asked North American buy-side traders about how they use AI and found 15% already incorporate internal AI tech into their trade execution workflow, while a further quarter plan to do so within the next 12 months.
Most respondents (80%) say that algorithm optimization will have significant impact from AI.
“Optimizing trading algorithms in real time is the holy grail of AI for buy-side traders,” says Jesse Forster, Senior Analyst at Crisil Coalition Greenwich Market Structure & Technology and author of Great expectations for AI in equity trading. “But is also risky proposition requiring a significant investment of time and money, and one that only a handful of firms are equipped to handle.”
However, the benefits also include processing post-trade transactional cost analysis and 60% of study participants believe AI will have a meaningful influence in venue selection, and half expect AI to have a sizable impact on broker and strategy choices.
But while investment and time is required to ensure implementation of AI within trading desks it done to the optimum level, especially given a lack of quality data, firms may not see the ROI that investors expect.
“However, with careful planning, investment and collaboration, we believe that AI can play a transformative role in equity trading execution, enabling buy-side traders to make more informed decisions and achieve better outcomes,” concludes Forster.
InvestmentNews recently spoke with Mark Trousdale, chief growth officer at Communify Fincentric, a firm started by former InvestCloud leaders and now working with over 90% of leading online brokers in the US, about the ‘game-changing potential’ of deterministic AI.
A complaint by the Social Security Administration's chief data officer alleges numbers, names, and other sensitive information were handled in a way that creates "enormous vulnerabilities."
The New Orleans-based 5th Circuit has sided the industry groups arguing the commission's short-selling rules exceeded its authority.
The deal will see the global alts giant snap up the fintech firm, which has struggled to gain traction among advisors over the years, for up to $200 million
Elsewhere, Osaic extended its reach in Knoxville with a former TrustFirst team, while Raymond James scored another win in the war for Commonwealth advisors.
Meanwhile, EP Wealth extended its Southwestern presence with a $370 million women-led firm in Santa Fe, New Mexico.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.