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The stock market is a human-designed, human-run financial system. It was created to give value to corporations. In the 1960s, the average share was held for four years. Now, the average share is held for less than 10 seconds. 

With the introduction of AI to the stock market, it has completely changed the way that the stock market operates. With this rapid buying and selling, companies need to adjust their strategies. There are a variety of industries AI will disrupt – Wall Street being one of them. 

blue and yellow graph on stock market monitor
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How Can Wall Street Benefit From AI?

AI-driven systems can foresee market trends but also help to make the trade better. While there is understandable anxiety about bringing AI into a human-designed market, what if it could be used to avoid bad situations? 

The stock market crash of 2008 occurred on Sept. 29, 2008. The Dow Jones Industrial Average fell 777.68 points in intraday trading.

Check out some more benefits of bringing AI to Wall Street:

  • The ability to analyze millions of data points
  • Being able to execute trades at the optimal price
  • Forecast markets with greater accuracy
  • Efficiently mitigating risk which provides higher returns

Another Benefit of AI on Wall Street

With the introduction of AI to Wall Street, there will no doubt be some jobs that will be replaced by AI. And although this may seem like a “doom and gloom” statement, AI will also introduce new jobs to many industries. New problems will need to be solved, and humans can be the ones to focus on the complex, more interesting issues, while AI works on the rest. Humans will also be needed to ensure that the AI used on Wall Street is working as intended.

Companies that are Making AI Work in Finance

Industries AI Will Disrupt includes Wall Street. A group of men sit around a boardroom table with a large screen TV at the end. Everyone has phones and laptops and they are looking at charts and graphs
Photo by Mikhail Nilov on Pexels.com

AI is a game changer for the stock market. Electronic trades account for almost 45 percent of revenues in cash equities trading. There are many startups that are building their businesses around the impact that AI can have. Such as:

  • Sentient Technologies Inc: This startup has spent 10 years training an AI system that can scour billions of pieces of data, spot trends, adapt as it learns and make money trading stocks. 
  • Emma: In a new way, this startup launched a hedge fund last year using AI to write news articles.
  • Greenkey Technologies: Greenkey is using AI for trading by incorporating natural language processing technology and speech recognition software to save traders time searching through large amounts of data. 

“Trading is one of the top 10 places that AI can make a difference…a trading algorithm can look at the data, make a decision, act and repeat—you can have full autonomy.”

~ Nello Cristianini

There Are Industries AI Will Disrupt – Time to Get Ahead!

Change is scary. But automation has the ability to take the monotony out of the stock market, leaving the fun stuff for the humans. If you are wondering how you can use AI, reach out to one of our Chatbot Consultants. Save your human workforce for the complex problems.

Chatbot compliance is another important factor to keep in mind when developing a chatbot. In finance, nations regularly update financial regulatory requirements. This means that processes and systems also need to continually improve and adapt. 

So if a financial institution wants to incorporate a chatbot, they need to know that it’ll be designed and implemented to be in line with the regulations and rules they must follow. In Canada, these include IIROC and the Canadian Securities Institute. 

  • IIROC: IIROC governs the activities of investment firms and builds the regulatory framework. 
  • Canadian Securities Institute (CSI): The Canadian Securities Institute has been setting the standard since 1970 for excellence in life-long education for financial professionals. It is part of Moody’s Analytics Learning Solutions, which offers credentials and educational programs.
Chatbot Compliance

Benefits of Chatbots in the Banking and Financial Industry

In the banking and financial industry, here are just a few of the benefits to using a chatbot:

  • Support that is available 24/7
  • Easy to use for customers
  • Customer satisfaction is easy to measure
  • Marketing experience can be personalized
  • Shows how progressive the banking industry can be
  • Presents cost savings to companies 

While there are clear benefits to using a chatbot, from marketing to customer service and even internally for employees, there are also important regulatory compliance concerns. This article will examine the process of integrating a chatbot that is compliant with financial regulatory bodies. 

The chatbot market size is projected to grow from $2.6 billion in 2019 to $9.4 billion by 2024.

Chatbot Compliance

5 Legal Considerations for Financial Chatbots

  1. Disclaimers for Regulated Activities 

If a company is giving a chatbot the authority to give advice, the company and developers will need to ensure that the chatbot has access to current information. 

  1. Terms and Conditions 

If chatbots are being used to facilitate online transactions or give any type of advice, users should be aware that the help being doled out is from a chatbot, not a live human being.

  1. Protection of Data 

Since chatbots collect personal data, the data protection policy is essential to keep in mind, not just in the development phase. It should be regularly monitored.

  1. Infringement of the Rights of a Third Party 

Appropriate safeguards must be put in place to prevent copyright infringements since chatbots can use third party trademarks (accidentally) and can easily infringe on rights.

  1. Prevention of Chatbot Errors 

A chatbot has an impact on a company’s brand and image. It is important to be careful about potential detrimenta or incorrect responses that a chatbot may give. Close monitoring of the chatbot and the technology is essential.

Chatbot Compliance Case Study

Chatbot Compliance

Investment Company ABC 

(Please note the company name has been altered to ensure confidentiality.) 

This company operates as an investment firm in Canada and specializes in managing wealth for individuals.

The Problem: 

Investment Company ABC was very interested in developing and using a chatbot to increase customer satisfaction. Sometimes it can take a long time for customers to get questions answered about their accounts, and a chatbot that could deliver personalized information about current investments seemed like a great way to communicate faster. However, the main question was how to ensure that it was compliant.

The Process: 

The company felt it was important to work with a team that could understand their vision and help them meet their goals. They needed a chatbot that sounded human-like and one that would help to increase customer satisfaction. 

It was also essential to build a chatbot with compliance front of mind, due to the industry they operate within. In order to make sure that all the boxes were checked, regulations were followed and due diligence was performed, a chatbot consultant was the perfect gateway to line up requirements (compliance, level of customization, etc.) with the right developers. The company was committed to ensuring compliance, but knowing that the chatbot consultant would also be doing the same was extra reassurance.

The Solution: 

After meeting with the company, determining the use case and collaborating on the KPIs for success, the chatbot consultant facilitated the development of a friendly and positive chatbot using conversational AI technology. It provided key investment portfolio data and answered simple questions. The focus was to solve simple customer issues, all while ensuring compliance, including disclaimers, terms and conditions and a rigorous review process of the software. The bot continues to meet regulatory requirements and is improving its interactions with clients each and every day, as measured by the customers’ survey responses.

If you want to avoid chatbot compliance issues, reach out. One of our highly trained Chatbot Consultants can answer all of your questions today!