Marcos Lopez de Prado testifies before U.S. Congress

Marcos Lopez de Prado

Famed quantitative financial mathematician Marcos Lopez de Prado, who was recently featured as Master of the Robots by Bloomberg, testified today (6 December 2019) before the U.S. Congress, together with four other panelists.

The topic for the panel, organized by the U.S. House Committee on Financial Services, was Robots on Wall Street: The Impact of AI on Capital Markets and Jobs in the Financial Services Industry. The five panelists who testified are:

  • Charlton McIlwain, Vice Provost for Faculty Engagement and Development and Professor of Media, Culture, and Communication at NYU.
  • Marcos Lopez de Prado, Professor of Practice, Engineering School, Cornell University and Chief Investment Officer, True Positive Technologies.
  • Rebecca Fender, CFA, Senior Director, Future of Finance, Chartered Financial Analyst Institute.
  • Kirsten Wegner, Chief Executive Officer, Modern Markets Initiative.
  • Martina Rejsjö, Head of Nasdaq Market Surveillance, Nasdaq Stock Market.

Among the topics panel the panel discussed are:

  1. The potential impact of computer automation and artificial intelligence on the finance industry.
  2. The possible impact on jobs in the industry.
  3. The various types of data that are now available for machine learning systems in finance.
  4. Whether AI and machine learning methods could be helpful in detecting fraud in the financial markets.
  5. The training needed in the field, both for existing professionals and also for young people in the K-12 educational systems.
  6. The need to adjust immigration regulations to permit more of the talented professionals who are educated in the U.S. to remain here after graduation.
  7. Whether or not anti-trust action is required in the field to prevent a handful of large, successful firms from dominating the market and driving up prices.
  8. What other regulations or disclosure requirements may be required for the financial industry (e.g., to require purveyors of investment products to disclose the extent of testing and computer exploration used).

The Committee Memorandum (the call organizing the hearing) is available here: Committee Memorandum.

The video of the entire presentation, including questions by members of Congress and panelists’ responses, is available here: Video.

Marcos Lopez de Prado’s prepared statement for the hearing is available here: Lopez de Prado’s prepared statement.

Here is an excerpt of Dr. Lopez de Prado’s prepared statement:

Financial [machine learning] creates a number of challenges for the 6.14 million people employed in the finance and insurance industry, many of whom will lose their jobs, not necessarily because they are replaced by machines, but because they are not trained to work alongside algorithms. The retraining of these workers is an urgent and difficult task. But not everything is bad news. Minorities are currently underrepresented in finance. As technical skills become more important than personal connections or privileged upbringing, the wage gap between genders, ethnicities and other classifications should narrow. The key is to ensure equal access to technical education. In finance, too, math could be “the great equalizer.”

Retraining our existing workforce is of paramount importance, however it is not enough. We must make sure that America retains the talent it develops. The founders of the next Google, Amazon or Apple are this very morning attending an engineering or math course at one of our Universities. Unlike in the past, odds are that these future entrepreneurs are in our country on a student visa, and that they will have a very hard time remaining in the United States after their graduation. Unless we help them stay, they will return to their countries of origin with their fellow students, to compete against us in the near future, hindering our competitive advantage.

[Added 7 Dec 2019:] Bloomberg News has published a summary of the hearing, highlighting Lopez de Prado’s prediction that more finance jobs will be taken over by “robots.”

[Added 18 Dec 2019:] Bloomberg has also released this video interview with Lopez de Prado.

Comments are closed.