The challenges of new technologies in finance

The development of new technologies, in particular Artificial Intelligence (AI), used in finance, has accelerated sharply over the last three years and is entering a new phase. This boom, which is welcome for the financial sector, which concentrates jobs based on data, results in particular from the promises of deep learning (Deep learning) and the emergence of meaningful data (Meaningful Data). The latter have precisely taken over from Big Data by being more usable in AI systems applied to finance, as evidenced by the numerous ongoing projects led by large groups and fintechs. The stated objective is to achieve enhanced human intelligence using digital technology.

At the Louis Bachelier Institute (ILB), the topic of AI in finance aroused strong interest as early as 2014, a time when AI was still a myth. Initially, our thoughts focused on Big Data, with scientific conferences. Meet the Data, in partnership with the University of Berkeley, before gradually being refined with the launch in 2015 of the ILB DataLab, an applied research department dedicated to the transformation of finance professions by AI. At the same time, many researchers in our network have been interested in the impact of new technologies (AI and Blockchain), leading to the gradual creation of several research programs to work on these issues, such as the interdisciplinary program. Finance and Insurance Reloaded (FaIR) or the Digital Finance Chair.

To illustrate the topics covered by researchers and experts in our network, this new edition of Cahiers Louis Bachelier addresses the digital transition in finance. It starts with an interview with Charles-Albert Lehalle, scientific director of the FaIR program, whose ambition is to bring together as many researchers as possible to collaborate on the impact of new technologies in finance. The second interview gives the floor to Driss Lamrani, an AI specialist associated with ILB Datalab, who gives his point of view on the contribution of this technology in terms of financial risk management. The third article looks at the subject of robo-advisors for individual investors, which is growing in development, following an ongoing study conducted by Marie Brière. Finally, the last two articles based on the work of David Bounie and Winston Maxwell from the Digital Finance Chair, affiliated to Telecom ParisTech, focus on the bias and transparency of algorithms, a very topical issue that is particularly sensitive for users and regulators, at a time when these tools are becoming more and more frequent in everyday life.

Happy reading!

Jean-Michel Beacco,
General delegate of the Louis Bachelier Institute

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