Institutional traders are increasingly placing their bets on the transformative power of artificial intelligence (AI) in shaping the future of trading, reveals a recent survey conducted by JPMorgan, a leading multinational investment bank.
According to the latest edition of JPMorgan’s “e-Trading Edit: Insights from the Inside” survey, 61% of the 4,010 institutional traders surveyed across 65 countries foresee AI and machine learning (ML) as the most influential technologies for trading over the next three years.
The survey underscores AI’s ascendancy, with application programming interface (API) integration ranking second in importance, garnering 13% of respondents’ votes. Following closely are blockchain and quantum computing, each capturing 7% of respondents’ preferences. Mobile trading applications and natural language processing follow suit, each securing 6% of respondents’ endorsements.
AI and ML have steadily gained traction in JPMorgan’s “e-Trading Edit” report in recent years, marking a significant increase from the 25% recorded two years ago. Conversely, skepticism has grown around other technologies, notably blockchain and mobile trading applications, which have witnessed declines of 18% and 23% in investor interest, respectively, since 2022.
AI’s profound impact on finance is underscored by its ability to offer predictive trade insights and real-time market sentiment analysis. A 2022 Nvidia report reveals that 30% of respondents have successfully integrated AI and ML into their trading strategies, resulting in significant revenue reductions.
Despite the growing reliance on AI, institutional sentiment towards cryptocurrency trading appears lukewarm. The survey indicates that 78% of institutional traders have no plans to engage in cryptocurrency trading, a sentiment that has strengthened from 72% in 2023. However, there has been a slight uptick in the percentage of respondents actively trading or considering cryptocurrency investments, rising from 8% to 9% since 2023.
JPMorgan’s stance on cryptocurrencies has been polarizing, with CEO Jamie Dimon maintaining a critical stance towards assets like Bitcoin. Nevertheless, the company’s involvement as an authorized participant in a prominent Bitcoin exchange-traded fund signals a nuanced approach to the evolving crypto landscape.
In summary, JPMorgan’s survey underscores the growing significance of AI in reshaping the trading landscape, while also highlighting institutional caution towards cryptocurrency investments amidst evolving market dynamics.
