A $525 billion German banking behemoth wants to use robots to write its research reports

  • Germany’s second largest bank, Commerzbank, is exploring the use of artificial intelligence to write analyst reports.
  • Commerzbank has partnered with Retresco, a content-automation company to work on a way of creating research reports using AI.
  • The bank’s dive into AI-driven analyst reports comes at a time when major lenders are striving to differentiate themselves from their competition in response to the arrival of MiFID II earlier in 2018.

Commerzbank, Germany’s second largest bank, is exploring the use of artificial intelligence to write analyst reports, in another sign of a shift in how major financial institutions conduct their research.

As first reported by the Financial Times, Commerzbank has partnered with Retresco, a content-automation company to work on a way of creating research reports using AI. A similar technology has already been used in journalism to write brief earnings reports after company results are released.

The technology is not believed to be anywhere near ready to produce reports sent to clients, but Commerzbank – which has an investment in Retresco – is looking particularly at using it for earnings reports.

This area is showing promise because “equity research reports reviewing quarterly earnings are structured in similar ways,” Michael Spitz, head of Commerzbank’s research and development unit Mainincubator told the Financial Times.

The technology, the FT said, is “already advanced enough to provide around 75% of what a human equity analyst would when writing an immediate report on quarterly earnings,” according to Spitz.

However, more complex reports are a long way away.

“If it is related to much more abstract cases, we feel that we are not there yet – that we can or maybe will ever replace the quality of a researcher,” Spitz said.

Commerzbank’s dive into AI driven analyst reports comes at a time when major lenders are striving to differentiate themselves from their competition in response to the arrival of MiFID II earlier in 2018.

Swiss giant UBS, for example, is placing a heavy emphasis on alternative sources of data in its research, including famously dismantling an entire electric car to work out how much it was actually worth. Barclays is adopting a similar approach, recently hiring a data scientist from Buzzfeed to embed in its research department.

Other banks are taking different approaches, with Dutch lender ING placing a lot of its research on a free website called “THINK” which is accessible to the general public.