Institutions Embrace AI in Trading: JPMorgan Survey

A recent survey conducted by JPMorgan, a multinational investment bank, has revealed that institutional investors are increasingly placing their bets on the future of trading being heavily influenced by artificial intelligence (AI). Out of the 4,010 institutional traders surveyed across 65 countries, 61% believed that AI and machine learning (ML) would have the most significant impact on trading within the next three years. The survey also ranked other technologies, with API integration following AI and ML at 13%, and blockchain and quantum computing at 7% each. Mobile trading applications and natural language processing were chosen by 6% of respondents.

Over the years, AI and ML have been steadily gaining importance in JPMorgan’s “e-Trading Edit” report, with its ranking increasing from 25% to 61% in just two years. The survey also revealed that institutions have become more skeptical about the role of other technologies in trading, such as mobile trading applications and blockchain. Since 2022, blockchain has lost 18% of investors’ interest, while mobile trading applications have lost 23%.

AI has been transforming the future of finance by offering various features, including trade predictions and real-time threat identification. A report by Nvidia in 2022 stated that 30% of respondents have integrated AI and ML into their trading strategies, resulting in a reduction of annual revenue by more than 10%.

Interestingly, while institutional investors are doubling down on AI in trading, they are becoming less willing to get involved in cryptocurrency trading. The survey revealed that 78% of institutional traders have no plans to trade cryptocurrencies like Bitcoin or digital coins in the next five years. This percentage has increased from 72% in the previous year. A small increase was observed in the percentage of respondents already trading or planning to trade crypto, from 8% in 2022 to 9% in 2023.

JPMorgan’s stance on cryptocurrencies has been controversial in recent years, with CEO Jamie Dimon openly criticizing Bitcoin. Despite this, the company was named an authorized participant in one of the fastest-growing spot Bitcoin exchange-traded funds by BlackRock.