4 Ways How AI Aids Investors

4 Ways How AI Aids Investors

By Capital Markets CIO Outlook | Wednesday, November 11, 2020

Artificial IntellegenceAI can enable investors to focus exclusively on decision-making while lending them with current market updates and recommendations.   

FREMONT, CA: Artificial intelligence has been dramatically transforming capital markets. Typically, 75 percent of the trades around the globe are being handled by algorithmic trading systems. Thus, AI can be the right fit here due to its potential to analyze data and form predictive patterns. AI can assist the traders in minimizing risks and maximizing ROI. Moreover, AI can save time for the traders by gathering and analyzing data required for making high-value trade decisions. Here are some of the prominent areas where AI can be an invaluable contributor.

 Document Review Using NLP

In a conventional setup, accountants and other professionals in capital market firms would require a few days to review and approve a financial deal. However, a data-trained ML system can review the documents in a few seconds along with a higher level of accuracy. 

Chatbots for Checking Account Balance

Investors and traders need a real-time value of their stock prices, which is crucial for decision-making. Going through a manual approach, a trader has to pick up stock prices from the stock market indices and deploy certain mathematical and financial formulae to reach an investment decision. The process is time-taking and prone to human errors as well.

AI can prove to be effective incorporation as it will offer real-time stock alerts to the traders. For instance, some of the AI solutions allow users to receive alerts about their stock performance, move funds, and even access live customer support from online brokers.

Financial Prediction via Artificial Neural Networks

It’s difficult to predict the fluctuations in the stock market. Even the seasoned traders cannot decipher the complexities involved in stocks beyond a certain extent. However, according to the studies in Stock market index prediction using artificial neural networks indicate that AI and machine learning (ML) can predict the stock market indices with considerable accuracy.

AI-based predictive analysis solutions can loosen the inhibitions among the asset management companies and public financial institutions that are hesitant to make big bets with public funds. AI solutions will also encourage private traders to take calculated risks to increase their ROI.

Financial Reporting Using NLP

Traders depend on financial reports of enterprises to make decisions over whether to buy, hold, or sell a stock. Generally, financial reports depict a maze of numbers printed in rows and columns. Moreover, the reports are prepared according to global accounting standards, regulatory requirements, and tax reporting procedures. Such a formal approach followed during the preparation of financial reports makes them a perfect dataset that can be analyzed via NLP and ML. Moreover, the AI systems can thoroughly analyze the datasets to estimate the figures such as net earnings, earnings per share, profit margin, and others. Traders and investors can utilize the estimates to design a future-oriented investment strategy. 

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The next generation of AI technologies will offer several innovative tools, such as AI assistants. The AI-driven trade assistants will be responsible for providing alternatives and tradeoff figures along with investment recommendations to the asset managers. The investors will be involved in the decision-making processes and improving data sets for the AI assistant to enhance its future modeling. With ML-enabled automated trading technology, getting ready to set the stage for future trading, investors and traders need to upgrade their technological toolkit constantly. Early steps in this regard will allow investors and traders to minimize losses and maximize their revenues in the long run. 

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