Commerzbank decided to replace analysts with machines

German bank Commerzbank is experimenting with artificial intelligence (AI) to see if it can write simple analytical reports. Banks are forced to reduce the cost of analytics due to the EU Directive "On Markets in Financial Instruments" (MiFID II).

Details

• The bank is working on this project together with Retresco, which it invested in two years ago through its fintech incubator.
• Michael Spitz, head of Mainincubator, the research and development arm of Commerzbank, called the application of AI to banking analytics promising. The quarterly reports of companies are written according to one template in accordance with generally accepted standards, and this allows a program based on the principles of machine learning to extract relevant content from the reports and create analytical notes based on it. Similarly, Retresco algorithms are now being used to write football news.
• The technology is already advanced enough to create about 75% of what an analyst writes in a quarterly report, Spitz said.

Context

• Although the Commerzbank project is still in its early stages and it could be years before machines start sending policy briefs, AI technology is attracting the attention of other banks as well. As the head of one of the investment banks admitted to the Financial Times, it is already possible to improve the work on analytical reports with the help of algorithms and AI tools. At the same time, he called quarterly reports the work that robots should do. Analysts interviewed by the FT at a number of other banks say they are also experimenting with AI and process automation in this area.
• Following the release of the EU Markets in Financial Instruments Directive (MiFID II), European banks can no longer provide free analytics to customers. If earlier banks included this service in the cost of the trading commission, now they are forced to charge it separately. And this has already affected the income of investment banks: some of them say that their receipts from analytical notes were 30% lower than expected.

If someone had doubts before that artificial intelligence would displace people from banking analytics, then after the experiments of Commerzbank we have to admit that at least some of the tasks of such employees will be transferred to machines in the near future. You can read about other professions at risk

Daria Serezhkina