May 18, 2017 5:33 am JST

Japan's financial industry embracing AI

Brokerages, stock exchange see new tech providing extra edge

Artificial intelligence could be used to catch suspicious activities on the stock market.

TOKYO -- From chatbots to detecting suspicious stock trades, members of Japan's financial industry are adopting a variety of new artificial-intelligence-based technologies to improve their clients' experience and focus manpower on more urgent tasks.

SMBC Nikko Securities is adopting a chatbot system developed by NTT Communications that uses AI to automatically respond to clients through the Line messaging app. It will start by answering frequently asked questions, such as on initial public offerings, NISA tax-free investment accounts, the "My Number" national identification system and setting up new accounts.

The system will pass on more complex questions, such as on stock market movements, to a human operator. But SMBC Nikko hopes that by October, the chatbot will also be able to answer inquiries on stock prices and account balances, and issue notifications on rapid fluctuations in asset prices.

The brokerage is merging with SMBC Friend Securities next January. It hopes to improve the quality of its services after the deal while keeping any increase in the number of staffers at call centers and other facilities to a minimum.

Daiwa Securities Group and the Daiwa Institute of Research jointly launched a service on Friday that predicts which stocks are expected to rise in the next month by analyzing earnings data. The service is available for clients with accounts at Daiwa Securities. The stocks picked out by the system based on the last six years' worth of data have reportedly outperformed the Topix index of all first-section issues on the Tokyo Stock Exchange by over 4 percentage points.

Mizuho Securities has introduced a system that automatically adjusts the timing of stock purchases for institutional investors, based on AI-generated predictions of prices 30 to 60 minutes in the future.

Financial companies are also using AI to assist with back-office operations, which tend to involve large amounts of trading data. In June, Nomura Securities will start gradually rolling out a system developed by Fujitsu to detect anomalies and typos in data inputted by humans.

Brokerages are not the only ones riding the trend. Japan Exchange Group, through its regulatory arm, is devising a mechanism to detect attempts at market manipulation and other suspicious activity. The growth of high-frequency trading has made it a challenge for humans to keep track of each and every transaction. But by using AI, employees can instead focus on matters that require greater scrutiny.

(Nikkei)

Daiwa Securities Group Inc.

Japan

Market(Ticker): TKS(8601)
Sector:
Industry:
Finance
Investment Banks/Brokers
Market cap(USD): 10,209.1M
Shares: 1,699.38M

Fujitsu Ltd.

Japan

Market(Ticker): TKS(6702)
Sector:
Industry:
Technology Services
Information Technology Services
Market cap(USD): 15,514.4M
Shares: 2,070.02M

Japan Exchange Group, Inc.

Japan

Market(Ticker): TKS(8697)
Sector:
Industry:
Finance
Investment Banks/Brokers
Market cap(USD): 9,918.89M
Shares: 549.06M

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