The financial sector increasingly uses AI to enhance trading, streamline operations and mitigate risks. AI is transforming the trading landscape by offering tools that help investors better understand their portfolio needs and manage risks.
Unlike human traders, AI algorithms are free from emotional biases, allowing for more consistent and effective decision-making. AI can quickly process vast datasets, uncovering market trends and opportunities that human analysis might miss.
“The information age has presented investors with an abundance of data. However, they may struggle to filter through the data for insights effectively. Speed is crucial in trading as traders need to respond to market events and make informed decisions swiftly,” says Wilson He, managing director of OCBC Securities.
OCBC Securities has consistently leveraged technology to enhance its trading services. Their latest innovation, AI Oscar, is a virtual trading assistant on the iOCBC platform, offering users personalised trading insights and advanced market analysis.
Described as a groundbreaking AI-powered trading assistant in the stock broking industry, AI Oscar stands out by generating and delivering personalised trading ideas. Unlike many other AI-enabled applications, this tireless assistant continuously analyses the market and understands individual preferences, providing tailored trading and investment insights.
Built on a sophisticated transformer-based neural network model, AI Oscar mimics the human brain’s decision-making processes. Unlike rule-based models that rely on a few preset criteria, AI Oscar’s deep learning network ingests large volumes of data and develops its predictive parameters by analysing the interactions within the data.
Each day, it processes vast premium data from Refinitiv provided by OCBC Securities. In addition to standard fundamental and technical indicators, it analyses granular data such as global transaction records for each stock. This information is then fed into the deep learning network, which employs over a million parameters to generate a single stock price signal.
Personalised watchlist
AI Oscar is available to investors on the iOCBC online trading platform under the “watchlist” tab. With AI Oscar, this virtual trading assistant will provide a personalised AI watchlist comprising a weekly list of 15 hyper-personalised stocks based on the investor’s profile, considering information such as age group, previous trade history and current holdings with OCBC Securities.
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While it does not consider investment objectives, financial situations and particular needs, AI Oscar works so that as investors make more trades, it can analyse that data and better provide a more personalised watchlist. The algorithm considers the past prices of stocks over 12 months, along with technical and fundamental indicators, news sentiments and rigorous backtesting.
In the watchlist, AI Oscar presents key information in an easy-to-read format. For each stock, it displays fundamental data such as earnings per share, price-earnings ratio and dividend yield. It also shows technical indicators, including the relative strength index, volume and 14-day moving average, based on patterns from the past 14 days. Additionally, each stock pick provides the potential price upside to two decimal places. While the AI offers personalised stock ideas for Singapore-listed stocks, it also includes recommendations for the US and Hong Kong markets due to their popularity among traders.
AI Oscar also regularly updates the latest insights, proactively engaging customers via app push notifications and email. “At the heart of what OCBC Securities strives to do is retain a customer-centric mindset. The launch of AI Oscar is one of our biggest advancements towards leveraging AI and technology to empower our customers to make better trading decisions,” says He.
Furthermore, the virtual trading assistant uses deep learning networks to process and analyse large datasets, identifying patterns and trends faster and more accurately than traditional tools. This technology allows it to continuously learn and improve, providing insights beyond basic market analysis. In addition to collecting trend data from investors’ habits and reputable sources like Refinitiv, AI Oscar also taps into data from Nasdaq.
Nick Luo, vice president and data science lead of AI Lab at OCBC Bank, says that AI Oscar went through rounds of fine-tuning before it “displayed robust correlations with historical market movements emerging organically”.
For traders with limited time for market research, AI Oscar offers a solution by conducting comprehensive analysis and providing actionable insights that are highly personalised. Samuel Wong, trading strategist and head of OCBC Equity Strategy Team, sees AI Oscar as a “super trader”. He adds: “AI Oscar, being an equity market analyst powered by AI, has no emotional baggage. It has abilities to upscale analytics by many folds and capture threats and opportunities in the blink of an eye.”
Empowering investors
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OCBC Securities merges AI’s precision with human brokers’ expertise for a balanced approach. AI Oscar offers data-driven recommendations, complemented by human brokers’ nuanced insights, empowering investors in complex trading.
Whether for seasoned investors or beginner traders, AI Oscar aims to provide insights and be a buddy for all navigating the market. AI’s role in trading goes beyond convenience — it eliminates fear and biases, enabling more informed and unbiased decisions. Integrating AI into trading platforms like iOCBC empowers investors to be agile and responsive in a rapidly changing market.
AI Oscar is empowering young investors with a preference for self-directed trading. In 2023, 97% of trades by customers under 35 were executed digitally without broker assistance. During the AI Oscar pilot, trading among this group surged by 50%. OCBC Securities plans to triple its active customer base in this segment over the next three years, fuelled by AI Oscar’s distinctive offerings.
“Being able to (act on a wide range of relevant information) quickly is especially important in today’s fast-paced world. AI Oscar addresses this need, and we expect it to become an indispensable tool, especially for digitally savvy young investors who prefer the self-service model,” says He, who adds that OCBC Securities’ trading representatives have found AI Oscar to be useful too, as the stock ideas generated can serve as a starting point for discussion between its trading representatives and customers.
Though AI Oscar is relatively new and evolving, data scientists continuously enhance its predictive accuracy. Recently, OCBC Securities conducted an in-house challenge between AI Oscar and human analysts for single stock predictions. There were weeks when AI Oscar outperformed the analysts and vice versa.
“Modelled in collaboration with in-house trading strategists, AI Oscar addresses challenges in timeliness by understanding individual preferences and promptly identifying key opportunities. By eliminating emotions from trading, AI Oscar is an invaluable tool to investors,” says He.
Data-driven trading
AI Oscar predicts bearish trends impartially, offering sell recommendations, unlike human analysts biased towards bullish opportunities. This collaboration provides diverse trading insights.
The trading assistant also surpasses humans by scanning and analysing data from thousands of stocks daily across major markets, simultaneously generating insights and reports. Previously limited to a few reports and trading ideas per week through human brokers, OCBC Securities can now scale this capacity up by 100 times with AI Oscar.
Like a diligent trading assistant, AI Oscar presents data meaningfully. After extensive training with OCBC Securities’ trading strategists, it can draw technical charts displaying support and resistance levels. This feature may be especially valuable for less experienced customers.
Most of all, this virtual trading assistant provides key technical and fundamental indicators of stocks, complementing its predictive engine with human-understandable elements for decision-making. Achieving this level of analysis for all stocks would require numerous human analysts, but AI Oscar accomplishes it through the computing power of its backend engine.
Integrating AI is essential for staying competitive and relevant in today’s evolving investment landscape. OCBC Securities, through AI Oscar, is dedicated to providing innovative trading solutions that enhance decision-making and foster a well-informed investment community.
