Blog article
See all stories »

Emergence of Conversational Agents in Investment Banking

Investment banks continue to be under pressure due to regulatory changes, declining revenues, and rising costs. Revenues generated by 12 biggest investment banks from trading and advisory operations are down by 11% for first six months of 2019, according to Financial Times article. COVID-19 pandemic will impact investment banks due to significantly reduced economic activity globally, and a potential economic recession may put pressure on revenues of investment banks. In this context, a majority of the Investment Banks are increasingly adopting technology driven business innovations as one of the key strategies to achieve business goals of revenue growth, Customer delight, improved operational efficiency, and regulatory compliance. Some of the key emerging technologies being explored include Artificial Intelligence, Cloud Computing, Blockchain, and Quantum computing.  One of the areas being explored using Artificial Intelligence are Conversational Agents for superior Customer experience and improving operational efficiency.

Conversational Agents

Conversational Agents (Chatbots) are computer programs capable of conducting a textual or auditory conversation with Customers. Rule-based chatbots can handle simple, routine queries, and FAQs only and lack self-learning and adaptive abilities. Intelligent chatbots powered by cognitive technologies simulate human-like conversation offering higher efficiency and accuracy. Intelligent chatbots equipped with continuous learning and adaptive abilities can provide personalized conversations to the users. Voice-based conversational agents combine voice-recognition technologies with cognitive technologies and can be invoked from smartphones or smart speakers like Google Home or Amazon Echo.

The market is crowded with many conversational AI platforms and the some of the leading conversational AI platforms are,, IPsoft, IBM Watson, and Google Dialogflow. Adoption of Conversational agents will continue to grow across the industries. Chatbot market size is poised to reach USD 1.34bn by 2024, according to a new research by Global Market Insights.

Emerging Use cases within Investment Banking

Adoption of chatbots in Capital Markets is gaining ground and Conversational AI in Investment Banking enable banks to enhance experience of Customers and internal staff and reduce total cost of ownership through automation. The Investment Banking Industry has seen early adopters starting to leverage conversational AI. Post-Covid, as banks recalibrate resilience and adaptability, conversational AI gains more prominence and adoption of conversational agents will enable banks to offer self-service capability to clients and reduce their dependency on the Client Service Groups (CSGs).

The conversational agents powered by NLP and ML have the capability to process both voice or text-based inputs, understand the intent, leverage domain-based ontologies, extract the information from knowledge base, and respond to the User. 

Research Desk

The Conversational Agents enable Clients to access the research services round-the-clock and answer user queries on analyst reports, research coverage, research analyst profile, target price and so on. Conversational agents can extract the information from unstructured research analyst reports. Well-trained conversational agents can understand the nuances of research related questions and provide accurate responses to the client. Examples are, J.P.Morgan offers clients to access research through Amazon’s cloud-based voice service. Morgan Stanley has built an AI-powered chatbot for internal users that can answer research-related queries and plan to roll-out to clients in 2020.

Sales & Trading

Despite increased electronic trading, high-touch Client services and voice-based trading are still prominent in the industry. These services cover both pre-trade queries (e.g. quote management) and trading processes (e.g. bond trade execution). The Conversational Agents can automate the human interaction through voice or text-based interface thereby improving the overall efficiency of the trading process. RBC and AllianceBernstein, for example, leverage chatbots that can message with each other on Symphony messaging platform and execute trades.

Post Trade

The CSGs of Investment Bank are the single point-of-contact for Clients and handle manually all Client queries such as trade status, trade breaks, etc. The CSG team internally follows up with multiple groups and work across various systems to collate the required information leading to a longer response time. The Conversational Agents can deflect most of the queries through automation and, also be available round-the-clock on the user preferred channel. BlackRock and BNP Paribas, for example, use chatbots to settle mismatched foreign-exchange swaps.


Many tier 1 Investment Banks have technology and operations spread globally with dedicated IT helpdesk providing 24x7 support. The Conversational Agents can be deployed to address repetitive IT support requests such as password reset, access to IT systems, full mailbox, etc. By implementing the conversational agents, Firms will be able to provide consistent service to employees, lower operational costs and free up helpdesk staff to focus on high value tasks. Credit Suisse, for example, deployed a chatbot to handle routine helpdesk requests.

Corporate Systems

Many tier 1 Investment Banks have global presence, and Employee engagement is crucial for employee satisfaction and an efficient workforce. HR policies vary from country to country based on local regulations and manual effort is required to answer repetitive HR queries from employees. The Conversational Agents enable Employee self-service and improve Employee satisfaction. The Conversational Agents can answer instantly Employee HR queries related to benefits, leave policy, health insurance policy, expense claim status, etc. OCBC bank, for example, introduced a chatbot for HR related queries from Employees.


Given the immense benefits associated with adoption of chatbots in Investment Banking, it is imperative for Investment Banks to start exploring the conversational agents. Firms can commence the conversational agent journey in areas like IT helpdesk or Corporate systems. Firms should seek to partner with strategic fintech firms to help bring in expertise and best practices to accelerate the adoption within the firm.



Comments: (0)