How AI is Being Used at Investment Banks – Trade Settlement

As part of our coverage on the use of AI in finance, CFTE takes a look and examines the impact of implementing such disruptive technology on various industry verticals. 

Artificial intelligence (AI) and machine learning are quickly disrupting the world of investment banking, as they provide a huge boost to operations in terms of efficiency. One of the key areas in which it is helping tremendously is trade settlement.

Usually, most trades from buy and sell orders put in by traders are processes and completed with no problem. However, should a trade fail for any number of reasons, they are rejected and left unsettled, joining a queue that must be settled manually. This is left to middle-office staff, who must diagnose what went wrong and fix the trade in question, which can include communication over the phone to both trading desks and parties involved. Solving discrepancies in the finance details and resolving limit violations also takes up precious time and human capital.

This is where AI and machine learning steps in, with the algorithm or other similar technology quickly able to identify what went wrong, analyse why it failed to execute, and predict the likelihood of such trades failing again through pattern recognition. As more data is fed to the machine learning algorithm, its predictions will become more accurate and effective, drastically reducing the number of trade settlements that are needed and in turn, operating costs.

According to a Goldman Sachs report, AI and machine learning will result in cost savings and revenue opportunities of between US$34 billion and US$43 billion in the finance sector by 2025. It is no wonder then that banks are quickly looking at how to implement such technology in their services in order to capitalise on this.

Finance executives should also take heed. Ramneek Gupta (Citi Ventures) says on the CFTE AI in Finance course that “AI and finance are inextricably linked” and that “financial services have always been very data driven, and it’s only going to get more and more so.” This means that individuals that have the right skills in AI and machine learning are very likely to succeed in this ecosystem in the future.

The CFTE AI in Finance course has been developed in partnership with Ngee Ann Polytechnic, a leading institute of higher learning in Singapore and features high-quality content taught by five senior lecturers and 18 industry experts.

With an easy to follow format, the course is perfect for busy professionals to understand the technologies behind AI and machine learning that are disrupting finance.

Click here to learn more about the CFTE AI in Finance course.


About CFTE

We are a platform supported by senior leaders from the largest institutions, startups and universities. We address the needs of professionals in finance to upskill in a rapidly changing industry being transformed by emerging technologies. More than 50,000 participants learn from our online courses, such as AI in Finance, Fintech Foundation or Extrapreneurship, a mini-MBA with fast growing startups such as Revolut or Shift Technology.


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