The Influential Role of AI in Investment Banking

In recent years, financial services are adopting Artificial Intelligence (AI) technology to manage financial assets, reduce operational costs, and increase revenue. They are deploying voice assistants, voice biometrics, chatbots to manage interactions with the prospective client’s investment banking.

AI can get deployed to detect fraud, manage finance, and investment banking. Fraud and cybersecurity applications reach up to 26% of the AI-related venture funding raised accounting for a total of $757 million as per AI Opportunity Landscape research reports.

The investment banking industry has realized the AI benefits in areas like investment decisions, alternative strategies, fund management, and others.

Some of the key vendors who are influencing the AI market in the investment banking sector include IBM, Infosys, Synechron, Genpact, Lexalytics, and IPsoft among others.

Let us see how AI is influencing the investment banks in detail.

The use of AI in investment banking firms

Most of the investment banking firms are taking a measured approach to understanding the AI benefits, its impact, and what talent they need to scale through pilot programs.

Artificial Intelligence is not a new terminology in the investor’s world, says Erin Gibbs, president, and chief investment officer of Gibbs Wealth Management.

Deutsche Bank and Humana have implemented AI to their humongous real-world data. AI helps to answer clients’ questions, predicts health risks, and also optimizes business processes.  Goldman Sachs uses AI for wealth and asset management. The software enables the users to predict best investments, identify undervalued shares, and determine profitability. Further, Sachs claims that they use data mining and machine learning against cyberattacks.

Likewise, Barclays, Alpha sense, Castle Placement, JP Morgan, and UBS uses AI in one or the other way. So, as rightly said by Gibbs, AI is nothing new in the investment banking industry.

The influence of AI in investment banking firms

Investment banks have three main operational procedures. They include research, corporate finance, sales and operating.  AI has its influence on all these three major operational areas.


AI can help to automate fundamental financial operations and create unbiased investment recommendations.


Natural language processing can eradicate conversational client-facing sales roles soon in almost every investment bank. AI can be ultra-specific and faster in executing trades with clients.

Corporate finance

The investment bank businesses mainly revolve around restructuring, IPOs, mergers, and acquisitions. AI can analyze reports, SEC filings, calls, conferences, press releases and other resources with a button or voice command. AI readily decreases the time spent on modeling valuations and making pitchbooks.

Reduce outsourcing of business operations 

Many investment banks outsource their customers’ data completion and its review to offshore countries to optimize costs. This may lead to data leakage and loss of customer trust. With AI, they can automate the processes in-house and thereby save time and money.

Detect suspicious financial activity 

AI can detect suspicious activity and prevent money laundering within the firm. It simplifies compliance and regulations. The use of biometrics can reduce human error in approving policies, authorizing tasks, and other important processes of the business.

Wrapping up

Though AI technology has its benefits to a greater extent, there is a fear that many investment jobs will disappear by 2025. The majority of the filed work may get transferred to AI.

It does not mean that people will lose jobs, but have to upskill themselves to new work proforma. Many new technology-related jobs will be in higher demand like programming and data analytics. It is how we use technology for our benefits by honing our skills to handle it. And investment banking sector is not an exception.

AI will free the time of analysts and enable them to concentrate on main businesses. It is up to us to keep up the pace with evolving technology by upskilling and upgrading.

News Reporter

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