FIA Japan Technology Academy Series “Exploring the Role of AI in Financial Capital Markets” Report

On June 9, the FIA Japan Technology Committee held its first event of its announced educational Academy Series, titled “Exploring the Role of Artificial Intelligence in Financial Capital Markets”, at the offices of Snowflake in central Tokyo. Over 60 people listened to the panel of experts discussing the subject from the perspective of regulators, exchanges, brokers and IT vendors, and enjoyed the casual networking reception that followed sponsored by FIAJ-member Colt.

Below are some of the key points that were discussed:

A Forward-Thinking Regulatory Stance:

The Financial Services Agency (FSA) highlighted its progressive concept, aiming to facilitate innovation through a "safe harbor" approach and emphasizing the "risk of not taking risk" for financial institutions. This set a positive tone for Japan's commitment to technological advancement. FSA is also organizing an online public forum on AI on June 18 (click here for details in Japanese: 「金融庁 AI官民フォーラム」（第１回）の開催について：金融庁)

Concrete Use Cases:

• Nomura Securities shared examples of their practical applications, including an internal AI chatbot called "NomuChat" that is used by over 7,000 employees, and the use of Generative AI to automate the creation of sales materials, starting with brochures covering foreign bonds.

• Nasdaq presented their own innovations, including the SEC-approved "Dynamic

  Midpoint Extended Life Order (M-ELO)" order type, which utilizes AI to dynamically adjust holding times and has successfully doubled execution rates within a couple of years.

Market-Wide Trends and Strategy:

• Colt Technology Services shed light on the massive infrastructure investment pouring into Japan, particularly in data centers, which forms the backbone for widespread AI adoption.

  
  

•  Snowflake delivered a powerful, unifying message, echoing conversations with OpenAI's CEO, that the greatest risk is inaction. They stressed the importance of learning from mistakes quickly to stay competitive.

A common thread throughout the discussion was the critical importance of robust governance based on a risk-based approach. At the same time, the overwhelming consensus was that financial institutions must actively learn and adapt to AI technology rather than watching from the sidelines.

Mark your calendar!

The next Tech Academy Series event is planned to coincide with the FIAJ Summer Party to be held on September 17. Details to be announced later.

Networking Reception Sponsor: