IMN: AI opportunity presents a responsibility to maintain standards
01 February 2024 US
Image: Lexy_Milliken_Marketing_Manager_at_IMN
AI will be transformative for the industry, but firms must continue to maintain standards, according to panellists at the IMN Securities Finance & Collateral Management Conference.
The Embracing Technology & Leveraging Innovative Solutions panel took place in Nashville and highlighted new innovative technologies that firms have identified across the field, in particular, artificial intelligence (AI).
Following the success of Chat GPT in 2023, AI has become front of mind. Previously thought to be a new innovative technology that would be incorporated in the distant future, since its advancement last year the timeline to market for AI has shortened considerably, according to Ana Mehta, product strategist for securities lending at BlackRock.
Hosting the panel, GLMX COO Salvador Giglio noted that the world entered a multi-decade period a few years ago, where the labour force began to grow at a slower rate than the general population. In the past, technology stocks have “gone parabolic” from a price perspective as a result.
“For businesses to grow and benefit their customers they have to adopt automation and do so because competition for skilled human resources is too high. The thesis is that we are entering a very strong bullish period for technology,” Giglio highlighted.
Currently, the main adoption of AI is through the use of chatbots, Mehta said. Although the wide adoption of a securities finance chatbot remains “a ways away”, Mehta anticipated that specific firms will later create their own internal chatbot to use as a centralised go-to resource for employees to complete certain middle- and back-office functions.
Reflecting on where AI will take firms in the future, Yuri Brightly, head of securities finance platform at Fidelity Investments, said that the use of large language models such as AI is “not far fetched” considering how far the market has come in terms of technology development.
He advised: “It is a matter of knowing where you are, implementing the solutions, but making sure you are spending an amount of time on these next steps to progress forward.”
Mehta added that the future state of AI usage could be a great opportunity. However, “alongside this opportunity comes a responsibility to ensure we are continuing to maintain our standards for meeting regulatory obligation and client expectation”.
She continued: “We need to make sure we are building an extended governance and control framework. It does not make sense to develop our internal AI tools without thinking about what the controls are.”
The Embracing Technology & Leveraging Innovative Solutions panel took place in Nashville and highlighted new innovative technologies that firms have identified across the field, in particular, artificial intelligence (AI).
Following the success of Chat GPT in 2023, AI has become front of mind. Previously thought to be a new innovative technology that would be incorporated in the distant future, since its advancement last year the timeline to market for AI has shortened considerably, according to Ana Mehta, product strategist for securities lending at BlackRock.
Hosting the panel, GLMX COO Salvador Giglio noted that the world entered a multi-decade period a few years ago, where the labour force began to grow at a slower rate than the general population. In the past, technology stocks have “gone parabolic” from a price perspective as a result.
“For businesses to grow and benefit their customers they have to adopt automation and do so because competition for skilled human resources is too high. The thesis is that we are entering a very strong bullish period for technology,” Giglio highlighted.
Currently, the main adoption of AI is through the use of chatbots, Mehta said. Although the wide adoption of a securities finance chatbot remains “a ways away”, Mehta anticipated that specific firms will later create their own internal chatbot to use as a centralised go-to resource for employees to complete certain middle- and back-office functions.
Reflecting on where AI will take firms in the future, Yuri Brightly, head of securities finance platform at Fidelity Investments, said that the use of large language models such as AI is “not far fetched” considering how far the market has come in terms of technology development.
He advised: “It is a matter of knowing where you are, implementing the solutions, but making sure you are spending an amount of time on these next steps to progress forward.”
Mehta added that the future state of AI usage could be a great opportunity. However, “alongside this opportunity comes a responsibility to ensure we are continuing to maintain our standards for meeting regulatory obligation and client expectation”.
She continued: “We need to make sure we are building an extended governance and control framework. It does not make sense to develop our internal AI tools without thinking about what the controls are.”
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