Artificial Intelligence or AI poker players and chess players have already proven very capable of beating human masters. What would stop the AI from doing exactly the same with the financial markets? What would happen to the world if AI would become portfolio players?

AI trading in financial markets

According to the story by HackerNoon, to some extent, it already has done so even though the general investment success still strongly relies on human interactions. In fact, there are very few industries that actually depend on the employee's decisions as much as the whole financial markets. With AI, are these particular human decisions being overwritten by proper machine learning?

The reality is that generally, "algorithm trading" has already successfully impinged the market, exacerbating the whole exclusive Dow Jones plummet of a whoppint 700 points in just 20 minutes back in Feb 2018. Both traders and analysts had agreed that the whole growing speed of algorithm trading models as well as automated sell orders have impacted the full collapse that day.

Benefits of AI algorithms

There are also a number of positive roles that AI is able to play in the whole financial industry. AI algorithms can reportedly reduce risk, manage fraud, detect, improve the operational efficiencies, and also deliver improved customer service.

For example, there are new systems currently in place within banks as well as other financial institutes that would flag some irregular behavior on the accounts. Machine learning reportedly takes this said function to a much higher level by promptly providing information that is also much more sophisticated and even more precise.

Artificial Intelligence on customer service and operational process

The Financial Times also reported a new case of identity theft that was actually detected when the criminal utilized the scroll bar on the user's own site. The actual user consistency reportedly used a trackpad when it came to banking online and is also based on this particular inconsistency. The bank's AI had been able to pick up the discrepancy.

Technology efficiencies are also already in place along with a number of large finance corporations. Artificial Intelligence goes beyond the whole algorithm as it provides highly-functioning robotics for customer service and operational processes.

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AI advances technology

The greatest intrusion as well as the biggest impact on the whole finance sector, whether it be perceived as good or bad, is that major banks as well as hedge funds are now using information gleaned from machine learning algorithms in order to advise their clients when it comes to portfolio investments.

According to an article by PWC, AI is now advancing quite rapidly in possibly every industry. Technology that is rooted in AI is now affecting the cost dynamics, introducing the whole new market participants, and also changing the long-held assumptions when it comes to the value on a particular routine basis. Some firms are reportedly using AI in order to improve the total way that they analyze securities and also make investment decisions. This is while others use it to be able to improve the core operational processes.

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Written by Urian Buenconsejo