Daiwa Securities to leverage AI tool to find new M&A opportunities

Maria Nikolova

A new AI tool will examine patent information and securities reports to find links between companies and propose strategic partnerships.

The range of applications of artificial intelligence (AI) in the financial services industry continues to grow and is now goes beyond AML monitoring and fraud prevention. An interesting example has been provided recently by Daiwa Securities Group Inc (TYO:8601). Together with Daiwa Institute of Research, the Group has developed a new AI tool which is set to help companies find new and unexpected M&A opportunities.

Using AI related natural language processing technology, the tool will scan public information such as patent filings and securities reports of domestic companies. The solution will thus find links between various companies. By utilizing this tool, it will be possible to make M&A suggestions with higher added value for customers, Daiwa explains. Companies will be able to find relationships that were difficult to find via human checks.

Japanese financial services providers have been keen to explore and adopt the various applications of AI. In May last year, for instance, a number of Japanese banks, including MUFG Bank, Bank of Yokohama, SMBC Nikko Securities and Resona Bank, agreed to participate in an AI experiment. The aim of the experiment is to enhance the customer-orientated services offered by the banks, especially the selling of financial products like investment trusts.

Another example was provided by Japan’s Aeon Bank, a part of Aeon Financial Service Co Ltd (TYO:8570), in September, as the bank announced that it will conduct an experiment to test how (and whether) a solution based on artificial intelligence technology will change the quality and efficiency of its interaction with customers. The experiment focuses on how AI will help analyze data from documents obtained during the interaction with customers.

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