Ways Artificial Intelligence is shaping the investment banking industry

Artificial intelligence (AI) is an excellent tool that is widely accepted in the banking services industry. It has excellent business potential that can be developed with care and caution.

Fraud detection, algorithmic trading, trading better codes, chatbots, virtual representatives, and risk management are some areas that can actively benefit from the use of artificial intelligence.

Automation is not a new aspect of Investment Banking (IB). Many junior banking experts working with Excel can easily create macros and help with financial modeling. But the process is still complicated and time-consuming. Even during the automatic process calculation, the numbers speak only for a moment. This means that a person will spend a lot of time on the screen.

Advances in AI are rapidly changing the face of the investment banking industry. In this article, we’ll look at how AI is shaping the future of IB.

AI in predictive analytics

Predictive analytics applies data to predict future business outcomes. Collaborating with all past data, the AI ​​algorithm analyzes present and present actions to predict future outcomes. A French bank called BNP Paribas used an AI-based tool called “Smart Chaser” in 2017 to help optimize their business matching methods using predictive analytics. On the other hand, the tool uses data recording of transactions carried out through BNP Securities Services, making it even easier for any type of default that leads to bankruptcy. It is also useful to predict the probability of the transaction in question, which may require economic intervention shortly. Smart Chaser tool can provide 98% accuracy to get relevant predictions.

Artificial intelligence in the digitization strategy

Incremental efficiencies can be developed quickly using artificial intelligence tools and new technologies that automate the banker’s workflow. The full range of processes in the investment banking industry is influenced by machine learning (ML) and artificial intelligence. Deploy AI significantly as part of a consistent digitization strategy. In the first step, identify the strategy by rethinking the entire process. Get other employees to adapt to AI too, as it enhances and complements the way people work.

AI in market data collection

A simple AI system is very useful for removing excess threat data for someone who works for an investment banking company. Experts working in these companies need to keep up to date on the latest developments. An artificial intelligence system helps to automatically collect and research data for future market forecasts.

According to a Qualtrics report, about 97% of researchers concluded that artificial intelligence would eventually eliminate the role of market analysts, statisticians (95%), and analysts (94%).

As the AI ​​system needs a large amount of data to feed, the advancement in technology simply means that methods can now be easily fed with data collected from multiple sources.

AI for commercial processing

The investment banking industry can use artificial intelligence to automate transaction processing for its clients. It offers faster trading and some solutions can identify potential investment strategies for the client to consider. He can also execute trades on different markets.

A trading automation solution requires an ML algorithm to match traders’ buy/sell orders with brokers, exchanges, or other trading systems that can execute the order. Many electronic paths limit liquidity and maximize costs to the trader, but the algorithm can be improved over time to find the cheapest and safest way to execute trades.


As AI technology improves, the IB industry can effectively focus on making better decisions with much more precision. Over time, it appears that the Internet has invented entirely new business models. AI will do the same for the IB sector.

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