How will stock exchanges look by 2047 in an AI-driven world? Here is a cue

With the rapid emergence of artificial intelligence (AI), questions are emerging about what stock exchanges may look like by 2047, the 100th anniversary of India’s independence. The milestone coincides with the Modi government's broader vision of transforming the country into a fully developed, prosperous and self-reliant nation by that year. Speaking at GSMC 2.0, the second edition of IFSCA's flagship securities market event at GIFT IFSC, panellists said the market structure could be different from what it is today. Stock exchanges will stay relevant, they added.

Michael Syn, President at SGX Group, Singapore, cited the Turing Test, which suggests that if one can talk to a machine and cannot tell if it is human, then machines have achieved human intelligence.

"But we passed that five years ago and nobody thinks these chatbots are humanly intelligent. The definition of useful intelligence changes with time. 2047 is still a long time away. A few of the things happening today make me believe that the market structure would certainly be different. But whether stock exchanges will still be relevant is a separate topic," Syn said.

The Turing Test, introduced in 1950 by Alan Turing, is a foundational concept in artificial intelligence that serves as a benchmark for evaluating whether a machine can demonstrate intelligence indistinguishable from that of a human.

Syn explained that the question regarding stock exchanges is whether one believes that the joint stock company, the way exchanges have been organised for hundreds of years, with permanent capital available to shareholders, will stay as a legal construct. He said this is the key question.

"If that is not true, you don't need stock exchanges. Market structure going ahead would be more decentralised and distributed," he said.

Syn said the interesting thing is not that stock exchanges now allow AI to trade, as that is already algorithmic. The real concern is decentralised autonomous organisations (DAOs).

"It is whether the role of a supervisor or the regulator can be embodied in codes and policies. Some of these DAOs are now saying the governance, policy making and regulations of certain chains will be done dynamically by AI. That is when it is going to be very interesting," Syn said.

Nikhil Kohli, Head of Equities in India at Citigroup Global Markets India, said he is conservative and believes there would still be a regulated marketplace in 2047. But the speed at which information is processed would be at a different level.

"When you combine quantum computing with AI, the investing climate would be very different. At the base, the stock exchange will still be at the middle of it," he said.

Murray Steel, COO for APAC at Qube Research & Technologies, said stock exchanges would be there in 2047, but how they look would be different.

"Some of the newer disruptive exchanges have come up. I would like to see more competition. Technology would be more disruptive and there would be a competitive landscape."