The rise of AI and automation is changing the way investment banks operate in investment banking, with technologies transforming the sectors operations. These include algorithmic trading, risk assessment, customer interfacing, and fraud detection. AI-enabled trading algorithms can track and process enormous amounts of market data in real-time, allowing investment banks to fast-track trade executions and process vast amounts of data faster and with less error than human analysts. Automation is being sought to eliminate repetitive tasks like data entry, financial reporting, and regulatory compliance, reducing human errors and allowing banking professionals to devote more time to strategic decision-making. AI chatbots are becoming more efficient than humans in answering client inquiries, portfolio management, and assisting clients during transactions. However, challenges include potential loss of traditional investment banking roles and integrity issues due to the elimination of intermediate third parties due to AI. An investment bank should have stringent protocols about security and regulations to ensure fairness and transparency of decisions made with AI.
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