AI: Market Trader and Market Cop

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LONDON, Apr. 02, 2019 – 

A new report commissioned by the Alan Turing Institute details how AI is transforming the financial services industry, but warns that up-to-date regulation is needed to avoid misuse of the technology and mitigate the potential for unintended consequences.

Authored by Seattle University's Professor Bonnie Buchanan, the aim of the report is to promote responsible adoption of AI technology. The report reveals that AI is already widespread in many areas of the financial services sector. AI and machine learning (ML) are frequently used today in credit card fraud detection, bank customer service chatbots, and robo-advisors which provide financial advice to consumers.

The report also addresses algorithmic trading, which uses AI techniques to trade on the world's stock markets. The idea is to simultaneously check multiple market conditions and execute trades at the best possible prices. Algorithmic trading also promises to increase accuracy and reduce mistakes (including "fat finger" trades, where human traders press the wrong button, and human errors caused by psychological and emotional conditions).

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