A JPMorgan survey indicates a growing belief among institutional investors that artificial intelligence (AI) will be central to trading strategies in the near future. The study, which included feedback from over 4,000 investors across 65 countries, found that 61% anticipate AI and machine learning to be the most impactful technologies in trading within three years.
Technology Preferences in the Financial Sector
The investors also identified other technologies with potential to shape trading, including application programming interface (API) integration, seen as significant by 13%. While blockchain and quantum computing each caught the attention of 7% of respondents, mobile trading apps and natural language processing interested 6%.
Changing Tides in Technology Trust
JPMorgan’s “e-Trading Edit” has tracked the increasing prominence of AI in investor interest, rising from a 25% significance level two years prior. However, the survey suggests a dip in confidence in blockchain and mobile trading apps, with an 18% and 23% decrease, respectively, in those considering them as promising technologies since 2022.
AI’s Growing Influence on Trading and Finance
AI is transforming finance by delivering features like real-time threat detection and market sentiment analysis for trade predictions. A 2022 Nvidia report noted that 30% of the surveyed participants reported more than a 10% decrease in annual revenues due to the integration of AI and machine learning.
Reticence Towards Cryptocurrency Investments
The survey also revealed that 78% of institutional investors have no intention to trade cryptocurrencies such as Bitcoin in the next five years, up from 72% in 2023. Yet, the proportion of those actively trading or interested in trading cryptocurrencies has slightly increased from 8% to 9% within a year. Despite JPMorgan CEO Jamie Dimon’s criticism of cryptocurrencies, the firm is engaged with BlackRock’s Bitcoin exchange-traded funds.
In essence, the findings underscore a pivotal shift towards AI in trading, juxtaposed with cautious sentiments towards cryptocurrencies among financial institutions, highlighting the dynamic nature of the finance industry amidst technological progress.