While Artificial Intelligence (AI) is causing significant disruption in industries such as transportation with the introduction of self-driving cars, it also has the potential to improve efficiency and transform capital markets.
Artificial intelligence (AI) is a branch of computer science that focuses on the development of intelligent machines that work and react like humans, including traits such as learning and problem-solving. What makes AI so transformative is its ability to learn, perform beyond human capabilities, evolve, and develop new capabilities in the same way that humans do.
The ability of computers to analyze data and form predictive patterns, allowing them to support activities such as service delivery, is the primary driver of AI. AI is capable of processing both structured and unstructured data. This is aided by the interpretation of content in documents such as legal agreements and the conversion of unstructured data into structured data faster and more accurately than humans.
This frees up professionals’ capacity to devote themselves to other assignments where human involvement adds maximum value rather than routine and repetitive tasks.
Historically, the capital-raising process has been highly intermediated, resulting in inefficiency due to reliance on the knowledge/capacity of professionals in the intermediaries, resulting in the sub-optimal matching of investors and investments. This reduces capital market efficiency and performance for both investors and corporations. However, by utilizing AI capital market intermediaries can mine data, analyze it quickly and efficiently, and ultimately deliver insights to customers that give them a competitive edge while providing enhanced value to their customers.
According to a recent World Economic Forum (WEF) report, artificial intelligence (AI) has the potential to democratize access to capital across the global economy by increasing capital market efficiency, safety, and performance.
The rise of AI is expected to contribute to the development of digital tools that will rapidly transform the capital markets value chain by introducing features such as automated deal matching, investor matching processes, automated trade reconciliation, fraud detection, and improved financial model accuracy.
AI has the potential to: simplify the deal-making process through predictive analytics and automation; improve investment performance through smarter, contextual, AI-driven insights; and deploy advanced capital and risk management solutions by leveraging AI-powered solutions in the capital markets industry.
AI can also improve capital market operations, particularly by automating repetitive tasks like number entry and reporting. According to the WEF study, AI can perform administrative tasks faster and better than humans, allowing them to focus on higher-value activities. Capital market intermediaries today perform a large number of repetitive tasks, such as prospectus preparation. However, using AI to automate these tasks can not only save hundreds of thousands of man-hours and funds but also ensure that investors are more satisfied by allowing them to analyze transactions and deals on their own, in real time.
Artificial intelligence (AI) is a branch of computer science that focuses on the development of intelligent machines that work and react like humans, including traits such as learning and problem-solving. What makes AI so transformative is its ability to learn, perform beyond human capabilities, evolve, and develop new capabilities in the same way that humans do. The ability of computers to analyze data and form predictive patterns, allowing them to support activities such as service delivery, is the primary driver of AI.
