The Johannesburg Stock Exchange (JSE) will use AI to take on insider trading and other transgressions by listed companies, according to a report from the Business Times.
Speaking at the release of the JSE’s 2019 results, CEO Leila Fourie said the exchange was “investing heavily in artificial intelligence” as part of its Smart Regulation initiative.
As AI systems can mimic certain human behaviour, they could be employed to detect irregularities around business dealings outside of the financial indicators themselves.
Fourie told the Business Times that AI would enable the JSE to do “social listening.”
“That gives us early warning indicators on where there is dissent, concerns, or comments that are made which trigger a need to do early investigation in potential corporate issues,” Fourie said.
The JSE is also planning to consolidate numerous information sources into a cloud-based solution.
Fourie explained that a quick-access tool was being developed that will allow the respective divisions to search all aggregated data in real-time, in a way that’s similar to how the Google search engine works.
“The development will later allow for the aggregation of external sources of information as well, such as social media, news feeds, and legal proceedings which involve listed companies,” Fourie said.
Additionally, the JSE will create business intelligence rules and combine them with machine-learning algorithms to be able to determine the “health status” of a listed company at any given time.
South Africa’s use of AI
The employment of AI in South Africa’s financial sector only shows part of its potential, however.
At the start of 2020, corporate president and chief operating officer at Lenovo Gianfranco Lanci said that the primary use of AI in South Africa – for automation and prediction – would broaden to other use-cases.
He cautioned that those who employ AI will have to be careful when it comes to the consumer’s right to privacy, though.
“Companies, however, will need to become more cognisant of individual’s right to privacy, and decide how to handle all that data they collect, as they increase their efforts to incorporate AI and ML into their business and products to streamline operations,” Lanci said.
“It’s an exciting space and AI will prove to be a game changer on the African continent, as AI and ML have the ability to answer to challenges in agriculture, mining, manufacturing, healthcare, and education,” he added.