By Collin Starkweather and Izzy Nelken
With the rapid growth in statistical modeling based on artificial intelligence (AI) and machine learning (ML) techniques in the financial markets, the importance of understanding how results are achieved is becoming just as important as the accuracy of those results. The authors explore these complex issues in clear and understandable fashion in an article titled Behind the Curtain: The Role of Explainable AI in Securities Markets.
The article further considers the regulatory and market incentives driving the development of explainable AI and ML techniques and provides an overview of recent developments in those techniques. Additionally, the piece discusses the increasing adoption of AI and ML techniques by securities market participants. Finally, recent advancements of AI in the security markets involving trading model design, risk management, and regulatory compliance are considered.
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