Market Surveillance in Capital Markets: The Growing Role of Artificial Intelligence

by Anshuman Jaswal, PhD, September 20, 2016
Industry Trends


Celent has released a new report titled Market Surveillance in Capital Markets: The Growing Role of Artificial Intelligence. The report was written by Anshuman Jaswal, senior analyst in Celent’s Securities & Investments group.

Greater automation is inevitable in today’s market environment with the current level of technological development. While compliance always requires a human element for analysis and making judgments based on available information, significant computing capability is required to process the vast amounts of structured and unstructured data. Machine learning (ML) and artificial intelligence (AI) functionality are critical areas for several of the leading vendors as they work on automating the surveillance process, thereby emphasizing unsupervised surveillance capabilities as compared to supervised ones. 

Artificial intelligence has a significant role to play in the development of the market surveillance industry. Greater automation, lowering costs, and ever-rising volumes of market data are all needs that AI capabilities can help firms address.   

Market participants are also demanding the use of AI technology for predictive analytics and to detect manipulative activity that is not currently detected. Vendors are trying to meet these requirements by improving machine learning capabilities, using neural networks, and developing other AI capabilities.

“The rise in regulation has forced firms to increase the size of their compliance divisions, but AI can be an important means of countering this phenomenon,” commented Jaswal. “In the last couple of years, we have seen some of the leading sellside and buyside firms take significant steps in using AI capabilities to improve their trade and communication surveillance capabilities.”

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].

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Table of Contents

Executive Summary



Key Research Questions





Key Research Questions


Artificial Intelligence and Surveillance Functionality


Current Relevance of Artificial Intelligence Across Vendor Products




Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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