Royal Bank Chief Executive Officer David McKay has publicly embraced AI since 2016, bringing on board industry and academic experts and establishing labs and partnerships. RBC has more than 200 data scientists working in various departments including capital markets. Advances in computer processing power have made what was once the realm of science fiction now achievable for everyday operations.
“It’s not easy to do this, but the rewards of doing it right are definitely proving to be worth it," RBC’s Harris said. “This is a long-term marathon, not a short-term sprint."
In the Chipotle note, data showed that negative tweets outnumbered positive ones in the week after the queso launch, and that sentiment remained negative, though improving, for some time. Two years ago, finding correlations between social media data and stocks didn’t work, but advances in natural language processing with AI makes this data more valuable in finding impact, according to Harris.
Harris, who describes using AI in financial research as being “a first- to second-inning phenomena," said he expects more work like that done on the Chipotle note.
"We’ve now got literally several dozen projects in our pipeline that follow a similar track," Harris said. “We’re basically trying to look at energy, industrials, a lot of different verticals."
This article was provided by Bloomberg News.