In recent years Machine Learning, and more generally the world of Artificial Intelligence, is experiencing a phase of greater diffusion than in the past, also in light of the large amount and variety of data and thanks to processing tools with high computational power. The banking sector is...

An unusual combination of events occurred simultaneously in early 2021: 1) a global pandemic had prevented people from spending money; 2) brokerage commissions were drastically reduced or eliminated; 3) interest rates sank to near zero or negative; 4) people had more free time than they could...

Algorithms have long been touted as a cognitive cure for the limitations of human judgement and decision making and recently, we have witnessed an increasing proportion of both high_stakes and mundane decisions being augmented by algorithmic aids. Yet, in spite of the growing ubiquity of...

Credit scoring methodologies have been widely used since the 1960s, to measure the probability of default of the applicants, in particular in consumer credit market. Traditionally, approaches based on regressive techniques have been used, but more recently models based on artificial intelligence...

This paper discusses the use of Machine Learning (“ML”) by wholesale financial market participants today and the major risks that may arise from wider adoption of ML across wholesale markets in future. It focusses specifically on whether ML will help or hinder the quest for fairer and more...

The successes of Artificial Intelligence in recent years in areas such as image analysis, natural language understanding and strategy games have sparked interest from the world of finance. Specifically, there are high expectations, and ongoing engineering projects, regarding the creation of...

The financial services industry is opening the theoretical system to address business and digital trans-formation. More reasonable and biological micro-foundations have emerged and are anchored fundamentally to the generation of sustainable value at investors’ micro-level and for the global...

Designing policy interventions involve assuming that certain information is reliably given about individuals in a society. This assumption has remained at the center of ongoing dispute between behavioralists and rationalists over theorizing and modeling human behavior. Relatedly, the...

The simulation of human mind might be possible with the advancement of cognitive science research on memory, thinking, reasoning, emotion, decision making and embodied cognition. But the attempt should avoid the Rationality Bias of “Human Intelligence as Optimal Computation Device”, that is...

This chapter presents the results of an ESMA pilot exercise to apply natural language processing techniques on a unique dataset of c. 54 000 Key Information Documents that describe structured retail products produced under the Packaged Retail Investment and Insurance-Based Products Regulation....