Finance looks like a sector tailor-made for artificial-intelligence disruption

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Bridgewater has launched a $2-billion fund to be driven entirely by machine learning and AI. The tech has been in development for several years

For several years now, some of the best jobs in technology haven’t been in the technology sector at all. They’ve been in financial services.

McKinsey’s prediction in 2022 that 30 per cent of the hours worked by humans in the financial services sector would be wiped out by 2030 now seems too modest. The reality is it could be pushed much higher if funds like Bridgewater’s deliver great performance and spawn more like it. It’s no wonder research shows that more than half of all finance workers believe technology is putting their jobs at risk.

The company also created an AI skunkworks to develop the proprietary systems that will underpin the new fund. To make sure the technology worked, it was tested inside an existing fund over the past year. While past performance is no indication of future success, it’s noteworthy that the fund with the machine learning embedded delivered double-digit returns after years of mediocre performance.

To be sure, there are some things AI can’t do, and never will be able to do. Namely, it can’t capture the whispers that often mean the difference between getting into a market at the right time and, as important, getting out.

 

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