Tag: Artificial intelligence (AI)

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RegTech: A U.S. regulator’s view on artificial intelligence in risk assessment
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The Future is Arriving Quickly: Global Asset Manager Migrating to Computer-Based Management
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FinTech in Canada – Towards Leading the Global Financial Technology Transition

RegTech: A U.S. regulator’s view on artificial intelligence in risk assessment

By C. Todd Gibson and Evan Glover

On 21 June at the OpRisk North America 2017 conference in New York, Scott W. Bauguess, Acting Director and Acting Chief Economist of the U.S. Securities and Exchange Commission’s (“SEC”) Division of Economic and Risk Analysis (“DERA”) gave a keynote speech on the use of artificial intelligence by regulators.  A transcript of the speech can be found here.  Bauguess provided some interesting background on the utility and use of big data and machine learning at the SEC to identify potential misconduct by market participants and investment managers, and the emerging use of artificial intelligence.

Bauguess’ speech discussed the SEC’s use of AI in its regulatory framework, initially discussing machine learning.  The SEC currently applies topic modeling methods, such as Latent Dilchlet Allocation (“LDA”).  LDA reviews text-based documents (e.g., registration disclosures) and reports on where, and to what extent, particular words appear in each document.  This occurs either by: analyzing the probability of words across documents, and within documents, to define the topics they represent (“unsupervised learning”); or incorporating human judgement and direction into the programming of the machine’s algorithms (“supervised learning”).

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The Future is Arriving Quickly: Global Asset Manager Migrating to Computer-Based Management

By C. Todd Gibson

On 29 March, a large asset manager announced a strategic overhaul of portions of its active equity management approach, focusing on the use of quantitative modeling over “traditional” human active management.  Click here for a copy of the press release.

Just a couple of weeks ago, our Pittsburgh office hosted its inaugural artificial intelligence program, The Artificial Intelligence Gateway For the Investment and Business Community that featured keynote speakers and panel discussions regarding the increasing awareness of artificial intelligence (AI) across all industries and the impact this new form of technology will have on business.  It was fascinating to hear from our keynote speakers about how AI actually works, how AI is used in self-driving cars, and future use of AI in various industries, from manufacturing to financial services.  In addition, one of the panels, focused on robo-advice and AI, where we discussed technological growth and how AI might be used in the investment management industry and some of the related regulatory and fiduciary issues.

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FinTech in Canada – Towards Leading the Global Financial Technology Transition

By Robert Zinn and Jim Bulling

The Digital Finance Institute is a prestigious Canadian-based think tank for FinTech established in 2013 with a mandate to address the balance of innovation and regulation; support initiatives for financial inclusion; and advocate for diversity in FinTech. The Digital Finance Institute also promotes FinTech in Canada through conferences and international alliances; the creation of Canada’s national FinTech Awards; the FinTech Cup, the new university FinTech startup challenge and by preparing research papers on FinTech.

Robert Zinn and Jim Bulling contributed insight and content to the U.S. and Australian FinTech ecyosystems.

To read this publication, click here.

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