Traders See AI Tech Shaping Their Future, JPMorgan Finds

Traders are betting artificial intelligence and machine learning will have the biggest impact on financial markets in the coming years.

More than half of respondents to a JPMorgan Chase & Co. survey of 835 institutional and professional traders said those technologies would have the most influence on trading in the next three years. That’s up from a quarter in 2022.

“This trend toward automation is something we’re seeing across the market now, and is expanding into the credit and rates side as well as commodities,” said Scott Wacker, head of FICC e-commerce sales at JPMorgan.

Quantitative hedge funds are “bringing systematic models optimized with machine learning to over-the-counter markets,” he said. “We’re also seeing asset managers using data in a more dynamic way using AI-enhanced technologies to assess and improve how they’re executing trades.”

Many asset managers already try to integrate some form of AI into their systems and algos, according to Bloomberg Intelligence’s 2022 US Institutional Equity Trading study. Still, the majority regarded AI as more of a “catchword emerging technology.”

Since then, the release of ChatGPT in November has turbocharged broader interest in AI technology and natural language processing. The tool has lit up the internet and sparked a fresh debate over the role of AI across workplaces.

“People are amazed at what AI technology can achieve,” said Wacker. “Natural language processing is moving along at pace, but it’s a little harder to configure right now. It’s at the beginning of a journey.”