In May, J.P. Morgan’s quantitative investing and derivatives strategy team, issued the most comprehensive report ever on big data and machine learning in financial services.
Titled, ‘Big Data and AI Strategies’ and subheaded, ‘Machine Learning and Alternative Data Approach to Investing’, the report says that machine learning will become crucial to the future functioning of markets. Analysts, portfolio managers, traders and chief investment officers all need to become familiar with machine learning techniques. If they don’t they’ll be left behind: traditional data sources like quarterly earnings and GDP figures will become increasingly irrelevant as managers using newer datasets and methods will be able to predict them in advance and to trade ahead of their release.
WHY IT MATTERS: AI recent progress was made possible mostly by supervised learning: humans providing AI algorithms with the right kind of insight to understand the world. Reinforcement learning provides an enhanced level of improvement as it lets machine teach machine. This is one example. Expect more in the coming years and brace for exponential growth of this technology.