No doubt you know by now that this must be the year for Big Data in the financial markets. The other large topics in alternative market data and research for the capital markets arenas; are the application of machine learning and artificial intelligence. One of the questions that continues to arise is how these technologies will impact Wall Street and investors. What has brought to the forefront these concepts of artificial intelligence(AI) and machine learning (ML)? In Wall Street and the Centaur David M. Aferiat states:
“The arrival of A.I. in our lives is the congruence of three developments: Cheap parallel computing; Big Data; and Better Algorithms. ”
Mr. Aferiat hits the nail on the head as far as the “Why now?” question. However, as with all new technologies or new applications of existing technologies it is critical for the consumers of these technologies to clearly understand what each provider exactly means by the use of the terms AI or ML. Liberal use of these powerful terms without clear understanding may cloud the reality of the full value of any vendor’s solutions.
Also in Wall Street and the Centaur David M. Aferiat asks…
“So will the machines take over Wall Street? Yes and no. From Baron Reuters’ pigeons to the telegraph, ticker, and telephone, to the ECNs, Wall Street has consistently adopted tools to leverage information asymmetries and develop strategies to generate alpha.”
At RelateTheNews we work closely with our clients and prospective clients globally to help them identify and leverage these information asymmetries contained within textual big data. To do this we use artificial intelligence, in this instance an encoded programatic approach, to analyze news in near real-time for sentiment – encoding this insight into quantifiable and actioanble signals for market participants.