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Institutional Investors Increasingly Embrace AI in Trading, JPMorgan Survey Finds

Institutional investors are increasingly placing their bets on the role of artificial intelligence (AI) in the future of trading, as indicated by a recent survey conducted by the multinational investment bank JPMorgan.

In 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 foresaw AI and machine learning (ML) emerging as the most impactful technologies for trading within the next three years.

According to the survey’s findings, AI and ML were closely followed by application programming interface (API) integration, with 13% of respondents selecting it as one of the most important technologies shaping the future of trading.

Blockchain or distributed ledger technology and quantum computing both garnered 7% based on the preferences of the respondents, while mobile trading applications and natural language processing secured 6% of respondents.

AI and machine learning have been steadily gaining ground in JPMorgan’s reports in recent years, with the technology accounting for just 25% in ranked importance two years ago.

Conversely, institutions have grown increasingly sceptical about the role of other technologies in trading, including mobile trading applications and blockchain, according to JPMorgan’s survey.

Since 2022, blockchain and mobile trading applications have seen a decline in investor interest, with a reduction of 18% and 23% respectively as promising technologies for trading.

AI has been reshaping the future of finance by offering various features, including trade predictions or identifying real-time threats to market sentiment.

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According to a 2022 report by Nvidia, investors have been integrating AI and ML, with 30% of respondents reportedly managing to reduce their annual revenue by more than 10%.

While reaffirming the importance of AI in trading, institutions surveyed by JPMorgan have become less inclined to venture into cryptocurrency trading.

According to the survey results, 78% of institutional traders have no intentions to trade cryptocurrencies like Bitcoin or digital coins within the next five years.

This percentage has increased since last year, as 72% of respondents indicated a lack of willingness to trade such assets in 2023.

Simultaneously, the percentage of respondents who have initiated cryptocurrency trading or already engage in it has slightly risen from 8% in 2023 to 9% in 2024.

JPMorgan has been contentious regarding its stance on crypto over recent years.

CEO Jamie Dimon has persistently criticised cryptocurrencies like Bitcoin, even after the company was named an authorised participant in one of the fastest-growing spot Bitcoin exchange-traded funds by BlackRock.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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