Artificial Intelligence for the Buy Side: Vendors for the Trade Value Chain

by Joséphine de Chazournes, June 16, 2016
Product Trends/ Reviews
Global
Wealth Management > Execution Quality
Wealth Management > Fixed Income
Wealth Management > Vendor Solutions
Wealth Management > Exchanges
Wealth Management > Hedge Funds
Wealth Management > Buyside
Wealth Management > Brokerages
Wealth Management > Post-trade processing
Wealth Management > Exchange-traded derivatives
Wealth Management > OTC derivatives
Wealth Management > Electronic Trading
Securities & Investments > Capital Markets > Algorithmic Trading
Securities & Investments > Capital Markets > Compliance and Regulatory
Securities & Investments > Capital Markets > Derivatives
Securities & Investments > Capital Markets > Electronic Trading
Securities & Investments > Capital Markets > Equities
Securities & Investments > Capital Markets > Execution Quality
Securities & Investments > Capital Markets > Fixed Income
Securities & Investments > Capital Markets > Foreign Exchange
Securities & Investments > Capital Markets > Institutional Trading
Securities & Investments > Capital Markets > Straight Through Processing
Securities & Investments > Capital Markets > Trading Technologies
Securities & Investments > Capital Markets > Vendor Solutions
Securities & Investments > Capital Markets > OTC derivatives
Securities & Investments > Capital Markets > Exchange-traded derivatives
Securities & Investments > Capital Markets > Post-trade processing
Securities & Investments > Capital Markets > Brokerages
Securities & Investments > Capital Markets > Buyside
Securities & Investments > Capital Markets > Hedge Funds
Securities & Investments > Capital Markets > CDS
Securities & Investments > Capital Markets > FX
Securities & Investments > Capital Markets > Cash equity
Securities & Investments > Capital Markets > Exchanges
Digital
Innovation and Emerging Technologies

Abstract

Buy side firms that are not already AI today in capital markets risks falling significantly behind their competition in the next two to five years.

 

Big data and the technology that enables its usage for business optimization or revamping are some of the tools available to the buy side to keep up with the world of tomorrow, and specifically their new competitors of a different breed.

The figure gives an idea of where Celent sees AI solutions leveraging this data with amazing technology to enable change for the buy side throughout the trade lifecycle.

In this report Celent presents a number of AI solutions commercially available from generalist vendors and from specialist financial vendors to address regulatory and reputational issues and process optimization, but also to enhance revenues.

“Considering the sell side is a historical provider of automated trading strategies and research to the buy side, it will be interesting to see how they position themselves into providing that technology this time around,” says Joséphine de Chazournes, senior analyst with Celent’s Securities & Investments practice and author of the report. “All the more so as exchanges will likely want to join the party and disintermediate the sell side even more by offering such technology to the buy side — for the buy sides that won’t be able to invest and reap opportunities from their big data.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

2

Introduction

3

 

Key Research Questions

3

Artificial Intelligence for the Buy Side: Why Now?

4

 

Weak Vs. Strong AI

4

 

Wide Vs. Narrow AI

4

 

Exponential Technology

4

 

Why Look at AI Now? What Is Different?

5

Artificial Intelligence in the Trade Value Chain

7

 

Regulatory Compliance

8

 

Reputational Risk

8

 

Process Optimization

9

 

Revenue Generation

10

AI Solutions Available to the Buy Side

13

 

Artificial Intelligence Techniques

13

 

Vendor Mapping

15

Conclusion

22

Leveraging Celent’s Expertise

23

 

Support for Financial Institutions

23

 

Support for Vendors

23

Related Celent Research

24

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