Institutional investors are increasingly placing their bets on the potential of artificial intelligence (AI) in shaping the future of trading, as highlighted in a recent survey conducted by multinational investment bank JPMorgan.
In the latest edition of JPMorgan’s “e-Trading Edit: Insights from the Inside” survey, a significant majority – 61% – of the 4,010 institutional traders surveyed across 65 countries expressed their anticipation for AI and machine learning (ML) to emerge as the most impactful technologies for trading in the upcoming three years.
According to the survey’s rankings, AI and ML hold the top position, followed closely by application programming interface (API) integration, which garnered the support of 13% of respondents as one of the key technologies shaping the future of trading.
On the other hand, there is a growing skepticism among institutions regarding the efficacy of other trading technologies, such as mobile trading applications and blockchain. Since 2022, both blockchain and mobile trading applications have witnessed a decline in investor confidence, with reductions of 18% and 23% respectively.
AI has been steadily reshaping the landscape of finance, providing capabilities like trade predictions and real-time threat identification to market sentiment. A 2022 report by Nvidia highlights the increasing integration of AI and ML among investors, with 30% of respondents reporting a reduction of over 10% in annual revenue.
While institutions are doubling down on AI’s role in trading, there’s a decreasing willingness to venture into cryptocurrency trading. According to the survey, 78% of institutional traders have no intentions of engaging in cryptocurrency trading within the next five years. This percentage has seen an uptick from 72% in the previous year.
JPMorgan’s stance on cryptocurrencies has been controversial, with CEO Jamie Dimon maintaining a critical view of assets like Bitcoin despite the company’s involvement as an authorized participant in one of the fastest-growing spot Bitcoin exchange-traded funds by BlackRock.
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