FLASH FRIDAY is a weekly content series looking at the past, present and future of capital markets trading and technology. FLASH FRIDAY is sponsored by Instinet, a Nomura company.
With generative AI all the rage, we at Traders Magazine wanted to test it out ourselves.
So we fired up ChatGPT to ask a question near and dear to Flash Friday’s heart:
What is the future of capital markets trading and technology?
The answer:
“The future of capital markets trading and technology is expected to be shaped by several factors, including advances in technology, changing regulatory frameworks, and evolving investor preferences. Here are some possible trends that may impact the future of capital markets trading and technology:
- Artificial intelligence and machine learning: AI and ML are expected to play an increasingly important role in capital markets trading, as they can help traders analyze large volumes of data, identify patterns and trends, and make better-informed investment decisions. AI and ML can also be used to automate certain trading functions, such as risk management and order execution.
- Blockchain technology: Blockchain technology has the potential to transform the capital markets industry by creating more efficient and secure trading systems. Blockchain-based platforms can enable faster settlement times, reduce transaction costs, and increase transparency in trading.
- Regulatory changes: Regulatory changes are likely to continue to shape the capital markets industry, as regulators aim to protect investors and maintain market stability. New regulations may impact the way trading firms operate and may require the adoption of new technologies.
- Increasing importance of ESG: Environmental, social, and governance (ESG) factors are becoming increasingly important to investors, and as a result, capital markets firms may need to develop new tools and strategies to incorporate ESG considerations into their investment decisions.
- Shift to electronic trading: The trend towards electronic trading is expected to continue, as investors and traders seek faster, more efficient, and more transparent trading platforms. This may result in increased adoption of automated trading systems and algorithmic trading strategies.
Overall, the future of capital markets trading and technology is likely to be shaped by a combination of technological advances, regulatory changes, and evolving investor preferences. Firms that can adapt to these changes and embrace new technologies are likely to thrive in the coming years.“
Call us impressed. Like, update-our-resumes impressed. Our observations:
- 302 words, high-quality, generated in 48.24 seconds. Uh, wow.
- It is spot-on as far as hitting many of the key themes that anyone who follows the space would include.
- It is surprisingly well-written. We figured it would be decent information, but we would have expected the text to be a bit more rudimentary and choppy.
- The one thing it lacks is examples / specifics, as there’s no mention of any firms, individuals, products, case studies that would support the highlighted trends.
Charles Morris, Chief Data Scientist Financial Services at Microsoft, spoke about generative AI at the STANY Annual Conference 2023 in March.
With regard to content creation in financial services, Morris said AI is invaluable in that it can create a first draft of, say, a research report, in minutes or less, whereas it would take hours for a human analyst to write the same draft. Morris referred to AI as a co-pilot, as the person retains responsibility for reviewing the report, overriding anything that needs overriding, and sending the report.
Morris said generative AI represents transformative, not incremental, change. “The value of the subject matter expert goes through the roof” as AI provides a wealth of immediate information for the SME to work with, he said.
Morris’s assessment of generative AI aligns with ChatGPT’s response to our question. The response is excellent as a first draft, primer-type piece, and it was generated in a tiny fraction of the time it would have taken a human writer. It would need some finishing touches by a human, but it is a tremendous foundation.
Based on our ChatGPT test drive, there is no reason to doubt the potential of generative AI.
