How Artificial Intelligence Will Reshape Capital Markets

How Artificial Intelligence Will Reshape Capital Markets

Naveen Joshi 14/06/2020 6
How Artificial Intelligence Will Reshape Capital Markets

Leveraging artificial intelligence (AI) in capital markets will enable investors to improve decision-making by providing them with insights, suggestions, and updates regularly.

It is widely believed that being successful in the capital market is all about luck. No one can completely understand the financial markets. We can only try to gauge what the future holds. But that doesn’t mean we should stop improving on methods that will help us better understand the capital markets. A better understanding of the financial markets will not only help minimize risks and increase ROI, but it can also help simplify the processes involved. One way we can get better at understanding capital markets is through the use of technology. Technologies such as AI, big data, and ML can help us make informed decisions by providing highly-accurate predictions and also ease our tasks through automation. Here’s what the use of AI in capital markets brings in terms of benefits:

Understanding the Role of Artificial Intelligence in Capital Markets

Artificial intelligence will redefine how we understand the financial markets. It will help us focus on decision making by acting as a trusted assistant and completing our tasks autonomously. Here’s how artificial intelligence will help us master the capital markets.

Understanding the Role of Artificial Intelligence in Capital Markets


Accuracy in predictions is one of the key factors to gain financially from capital markets. Artificial intelligence can bring this accuracy in analysis, which can help individuals achieve financial success. Artificial intelligence algorithms not only can analyze historical market data, but also can analyze data pertaining to external factors such as social trends, regulatory changes, and global economic impacts. Based on this data, it can predict future capital market trends with a high degree of accuracy.


Artificial intelligence can work as an excellent assistant. By providing regular updates to customers, it can help them in making better-informed decisions. Since this information is provided in real-time, it proves to be much accurate and efficient, and it reduces the time lost in the manual research process. Artificial intelligence in the form of voice assistants with NLU, NLP, and NLG capabilities can provide users with information in a way they can easily understand. Individuals don’t even have to physically interact with their devices to leverage these technologies. Similarly, chatbots can help solve clients’ queries over text or voice.


AI can help automate the trading process. An AI algorithm can be designed to buy and sell stocks at a predefined price. The trader, thus, doesn’t have to spend his time continuously monitoring the stock prices. An advanced algorithm can help predict prices of stocks based on their historical data and can carry out the trading process autonomously, independent of the user’s preferences. However, to minimize risks, a maximum amount for stop-loss can be programmed, say at 5%, to avoid serious financial losses.

Both individual investors and enterprises involved in capital markets have realized the potential AI brings. According to a report, about forty-four percent of capital market firms are already using AI in trading processes. And another seventeen percent have plans to implement AI in the next two years. If this trend continues, complete penetration of AI in capital markets in the future seems indisputable. The earlier firms adopt AI, the quicker they will start reaping the benefits.

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  • Pete Snowden

    Now that's so exciting !!

  • Matthew Barnes

    Capitalism is dead with COVID-19. Financial firms has to find new ways to survive.

  • Neil Gregory

    Hedge fund managers are investing significantly in artificial intelligence to leverage their portfolio

  • Andrew Wieslaw

    We are relying too much on AI....

  • Martin Rowan

    Very interesting!

  • Chris Trenorden

    The reservation I have with this is that reinforcement learning seeks to maximise reward, meaning that the model has to perform poorly in the beginning to learn the most optimal actions to take.

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Naveen Joshi

Tech Expert

Naveen is the Founder and CEO of Allerin, a software solutions provider that delivers innovative and agile solutions that enable to automate, inspire and impress. He is a seasoned professional with more than 20 years of experience, with extensive experience in customizing open source products for cost optimizations of large scale IT deployment. He is currently working on Internet of Things solutions with Big Data Analytics. Naveen completed his programming qualifications in various Indian institutes.

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