Nasdaq has integrated artificial intelligence into its Calypso platform, aiming to simplify and accelerate risk calculations for banks and insurance companies. This AI enhancement is designed to address the growing complexity and computational intensity of risk calculations in financial institutions.
The AI-based machine learning capability, part of a new feature called XVA Accelerator, uses a mathematical approach known as Chebyshev Tensors. Nasdaq says this method can process risk calculations up to 100 times faster than traditional methods while maintaining accuracy. The system is designed to adapt to changing market conditions, potentially reducing the physical infrastructure required for these calculations.
This update comes in response to increasing demands for complex risk calculations in the financial industry. For example, XVA sensitivity analysis can require over 1 trillion calculations per day for a typical portfolio, necessitating substantial computational power, Nasdaq said.
