Monday, September 24, 2018
Business

Netflix and Spotify-style algorithms to help suggest investments

Netflix-style algorithms could soon be widely used to recommend investments after UBS began trialling the artificial intelligence with its clients.

UBS confirmed it was in the early stages of applying recommendation algorithms – similar to those used by Netflix and Spotify – to suggest investments to its asset management and hedge fund clients.

The algorithm is currently being trialled in the banks corporate bond trading business but there are hopes to roll it out to other asset classes as well.

Read more: Banking culture needs to adapt as the algorithms learn to trade

Vinit Sahni, co-chief executive of fintech firm Arkera, which uses algorithms to suggest investment funds to its app users, said the technology was becoming increasingly in demand.

He said: “It's matching people, or investors, to things that really interest them, which is exactly what Netflix and Spotify do.

“It's a much more intelligent way of doing it.”

Arkera's machine learning platform connects world events and news directly to investment products.

Read more: Post-trust society: We now trust algorithms more than MPs or businesses

Sahni explained that the technology also “broke down” the investments made by clients into features, and then matched the investor with other products that shared those features.

He added: “It will continue to be used more widely, the calls are there for it.”

The UBS trial will also input previous trader behaviour and match investors with products UBS is trying to sell.

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