Make Way For The Robo-Trader

Robo-advisors first took over the advisory industry — now robots are infiltrating the trading floor.

It’s no surprise the financial services industry is undergoing a total transformation considering technologies like artificial intelligence, machine-learning and big data currently have or eventually will have a presence in every industry and furthermore in every job.

Technology first started disrupting the financial services space when equities trading shifted to electronic platforms decades ago. Then robo-advisers began replacing human financial advisers. And now, robots— more specifically artificial intelligence — will disrupt the day job of a markets trader.

Wall Street is entering a new era. The fraternity of bond jockeys, derivatives mavens and stock pickers who’ve long personified the industry are giving way to algorithms, and soon, artificial intelligence.

A recent Bloomberg article discusses how jobs on the trading floor are already shifting. One job in the cash/trading side of business is fascinating in how AI will be integrated to fulfill client orders at the best market price and time. Eventually, this AI called reinforcement learning will automate hedging and market making.

The brief description of this disruption leaves readers, well at least me, curious about how AI will maneuver complicated financials like hedge funds where trades and sell-offs are made in split seconds and the risk of a failed transaction — potentially due to inaccurate or premature AI — can cost a fund extreme amounts of cash.

It remains to be seen how successful AI will be in streamlining sensitive financial trades that have been traditionally handled by humans. And if the industry will be better off with a robot than a brain.

Read the full Bloomberg article here.