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JPMorgan is Using AI to Make Better Investments

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It seems like artificial intelligence is everywhere these days. From self-driving cars to customer service chatbots, the technology is spreading into many areas of our everyday lives. And now it’s moved to a new space—trading. JPMorgan, the world’s biggest debt trader, recently announced it is adding AI to its traders’ tool belts to give them a better understanding of the trading floor and help predict how the markets will move.

AI to Make JPMorgan’s Traders More Efficient?


The data analytics and machine-learning program called MSX will start in JPMorgan’s fixed-income sales and trading operations. Its main purpose will be to collect data from a number of desks to provide traders with a better real-time picture of what is happening in the market and help them predict what moves to make next. This is especially important as more and more data is used in trading, so much that it can be difficult for humans to keep up with data and still stay in compliance with new regulations. AI technology can find connections between data to drive more strategic actions than humans would be able identify.

The technology is designed to improve the performance of the company’s salespeople and traders and make them more efficient and service-oriented. JPMorgan has been clear that it isn’t out to replace its traders with machines or robots but instead wants to focus on humans taking advantage of AI-based investments.

“Having a more holistic view of trading data will improve our service delivery for clients,” said Troy Rohrbaugh, global head of macro at JPMorgan. “The Mosaic platform integrates securely with our existing technology infrastructure, and enables our teams to quickly make better informed decisions.”

The bank hopes that the technology will keep its traders ahead of the competition and changes in the market. The software can identify patterns in JPMorgan’s existing data to predict client behaviour and find products and offers clients would be interested in.

“Data analytics and artificial intelligence are changing the face of investment banking,” said Matthew Hodgson, CEO of AI startup Mosaic. “Banks understand that the insights locked away in their transaction and market data are potentially some of their biggest competitive advantages. They already have the raw materials, but MSX gives them the tools to aggregate and standardise that data and put it to work intelligently.”

Reliance on Fintech Startup

JPMorgan’s technology comes from London-based fintech startup Mosaic Smart Data. Its program will apply predictive analytics and artificial intelligence to traditional trading models and programs. By helping users anticipate market moves and client activity, the system should help traders be more accurate and efficient, which can increase the quality of its customer service and reduce costs. MSX is already used in JPMorgans’ rates trading.

Mosaic is a result of JPMorgan’s “In Residence” program, which was launched last year to develop tech startups that solve financial services-related problems. The program provides select startups with access to JPMorgan’s facilities, systems, and expertise for six months at a time. Clearly, the bank’s investment in startups is now coming back to help the company as it takes advantage of the new technology.

Other Banks Adding AI

Although JPMorgan is likely the biggest, it is by no means the only bank utilising AI. A fintech startup creating by an ex CEO of Barclays raised £34 million in September with hopes to introduce a digital banking platform. The first AI-driven exchange-traded fund, the EquBot LLC, was announced just the day before JPMorgan’s AI program.

AI has the power to change how we approach market trends and trading. If JPMorgan is successful with its new technology, we will undoubtedly see AI in the financial space continue to spread.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.