Capital markets webinars

How Innovation and technology drive change in private markets - pt 4

In the final part of our chat with Todd Billings from USDV Capital we talked about the imapct of Chat GPT and also Todd's future expectation for technology in Capital Markets, particularly the part mobile tech will play.

Don’t forget to watch parts one, two and three where we covered some of the background of USDV Capital as well as Blockchain and service provider integrations.

HubSpot Video


Katipult: The other big tech trend that's all over the news is Chat GPT and generative AI. I was wondering if that is something that is on your radar at the moment. And if that's something that you're thinking about or implementing?

Todd Billings: We haven't implemented Chat GPT into our private equity business per se, but the area where we do use Chat GPT is in the form of content creation.

We use ChatGPT as a helper–in the same way, as you would hold a meeting with the team or a colleague–when we just have the start of an idea and want to get started and flesh it out into more detailed thoughts or ways to present the idea.

Katipult: One of the ways that we think AI might be a bit of a game-changer in capital markets is taking some of the grunt work around some of the compliance pieces, the kind of work that you'd staff down to someone fairly junior at the moment?

This way, I think AI can potentially give teams significant resource advantages.

Todd Billings: I think it comes back to the concept we discussed earlier: data in, data out.

At the end of the day, if I'm asking Chat GPT about something, what where are they pulling data from, right?

And it may be relevant to my line of work or my industry, but is it the data that I would actually want to use?

So I feel like the real leaders are going to be able to leverage AI by figuring out how to layer in their own data to the databases that the large language model that is built on then they are going to get meaningful insights and meaningful ways to automate some of these processes.

As an example, when you can take a large language model and then say, “I'm a law firm and here's our experience with case law, not just general law,” then you can start asking some meaningful quick decisions that just a human would never be to figure out as fast as a computer. And so I'm really excited about the possibilities.

However, like any new technology, it's a little scary, but I do think we ignore it at our own peril. It's coming, and people are using it daily, and we're just in the beginning stages. And so I think we must stay abreast of where it's going.

More importantly, we need to ask where the information is coming from. Think about those basic fundamental skills that we learned in school around writing a research paper, where we need a bibliography,  references or Footnotes that show where the information came from

Specific to that point. If we hire developers to write code or build out specific technology, they may not be familiar with our industry.

It's one thing to write code, but it's another to have an idea of the outcome. So in finance, if I'm talking about millions of dollars or billions of dollars or trillions of dollars, those three zeros in each set make a huge difference. So if someone is writing code but needs to become more adept at understanding this, we have encountered problems.

It's similar when we do science, or we write a paper. We start with the thesis, What's my hypothesis? What do I expect to happen? We run an experiment and see if what was expected to happen either happened or It didn't happen, and we record the outcome relative to that,

And I think it is the same when we use AI; we must still start with the hypothesis. I'm expecting this to happen, and if it doesn't happen, maybe I can start to glean as to why it didn't happen, but I can't just accept it as fact.

Katipult: Our conversation has really got me thinking about the future. In the next five, ten or fifteen years, which areas of capital markets do you think are really ripe for technology and innovation in those time frames

Todd Billings:  Wow, I mean, really tough question and because I think every area, I mean, there's not an area that isn't affected by technology.

When I started trading on Wall Street, there were a ton of people down on the New York Stock Exchange floor. It was just crowds of people now, it's like only a few people and lots of computers. And I remember, as a market maker, I was talking to other people on the phone all day with the huge phone board.

Then everything became digital, and it was almost like playing a video game. And so technology is affecting us every single day. 
I mean, we go to sleep with the phone in our hand, we wake up with the phone in our hand, and so I think the main thing that I look for when I think about Technology is adoption.

If I'm building a website or I'm building an app, I'm thinking about it from a mobile point of view because the one thing everyone has all the time is their phone. So if I start there and build from mobile and then back into the desktop, I think that's the way that I look at technology and innovation from my point of view, and I think from a general capital markets point of view.

What's going to happen is it's going to be easier for more people to access the markets.

And when you have more people accessing markets, it allows capital markets to rise in value. If it's a million people or 10 million people, the more people have access,  the more capital markets are going to rise, and that access is going to come from technology and innovation.

So I think it just bodes well for capital markets to continue to increase as more people access technology.

Katipult: Thank you so much for your time, Todd. And it's been great to talk, and I look forward to seeing how things pan out in the future

Todd Billings: Yes, my pleasure, really a pleasure. Talking to you there.