AI Transformation of the Financial Instruments

Artificial Intelligence is rapidly evolving and is transforming the way we use and trade financial instruments of all kinds.

The Robots are coming to make the world of finance more effective. It might sound terrifying for some traders, but, hopefully, we’re a long way from any sci-fi inspired dystopia. Indeed, the Robots can provide all sorts of new and exciting opportunities.

The rise of the Robots

A report from Research and Markets finds that the algorithmic trading market could grow at 8.7% annually between 2017 and 2025, reaching a total market size of more than $18bn. The technology is developing at a large scale, and machine learning enables automatic trading systems to improve as they go, gradually becoming better at trading. They can analyse increasing amounts of data allowing them to spot emerging trends far earlier than their human counterparts might. In the battle against human traders, the scales are increasingly tipping in favour of the machines. Not only are they getting better at processing data, but they are also developing more human-like capabilities.

One such platform comes in the form of a trading robot - ROFX. Back in 2009, a group of software developers used their trading experience to devise an automated mechanism for trading on forex. In the beginning, they tested the platform in the currency markets using their own funds, but once it reached the level of positive dynamics – as the number of positive trades outnumbered the number of negative ones – they decided to open it up to the public.

Now, anyone – no matter what their level of experience is – can use the platform, opening up the world of financial trading to more people. All you need is the funds and the robots will do the rest. These systems can analyse vast quantities of information to make trading decisions which, in theory, could be more profitable than their human counterparts.


Engaging with customers is at the core of AI, which brings us to the use of chatbots. Companies of all kinds are making use of chatbots to improve the interaction with their customers. Bank of America, for instance, has introduced ‘Erica’ which sits inside its mobile banking app. It provides customers with quick information such as bank balance and transaction history. It can also recommend how to save money, improve your credit rating and much more.

TD Ameritrade, meanwhile, uses a chatbot via Facebook messenger, allowing customers to make deposits, check market information and ask simple questions. Users can use the bot to instantly make trades or access information.

As language recognition and speech software increase its value, chatbots become increasingly human-like and can engage in more natural sounding conversations with customers.

This can open up all sorts of possibilities. For example, if a user has asked about Bitcoin, the chatbot could come back with a message such as: ‘We see you recently enquired about Bitcoin. Would you like to open an account trading bitcoin or any other cryptocurrency?’

It’s a simple approach which enhances the engagement between users and the platforms, making it easier to trade with all sorts of instruments, but this is just the tip of the iceberg. AI is being used by financial firms in just about every part of their business operations in order to improve cybersecurity, increase regulatory compliance and prevent fraudulent dealings.

No wonder that so many people are predicting great things. Research and Markets believe the overall AI market could top £1.2trillion by 2020, as AI has already made such tremendous contribution to the financial markets, let's observe what it has to offer in the near future.