AI to dramatically reshape capital markets: David Schwimmer

Mumbai: India is emerging as a central force in the next phase of AI-led financial innovation, with its digital infrastructure and engineering talent positioning it at the heart of global capital market transformation, said David Schwimmer, CEO of London Stock Exchange Group, at the summit on Friday.

He described the country as "at the centre of the financial industry's transformation," highlighting its growing influence as artificial intelligence reshapes how markets function.

Artificial intelligence will drive significant and dramatic change in global capital markets, reshaping how decisions are made, risks are managed and financial infrastructure operates, he said while outlining his vision for the future.

"So across AI, tokenisation, public and private markets, we will see significant and dramatic change and innovation in the capital markets," he said, speaking on the topic, "Shaping Tomorrow's Markets: AI, Data and the Digital Transformation of Global Capital."

"To many in the financial sector, AI isn't new. But LLMs, agents, and other tools create opportunities to drive efficiency, productivity, and faster, more effective decisions," he said, framing the shift as evolutionary but now entering a more powerful phase.

For Schwimmer, the real inflection point lies in scaling AI responsibly across core market functions. "To deploy this technology at scale across our industry, we need to be able to trust the outcomes that AI produces. And this starts with the inputs, with the data," he said. In capital markets, where transactions are complex and regulatory scrutiny is intense, the tolerance for error is extremely low.

He emphasised that the differentiator in AI adoption will not be the volume of data but its integrity. "The critical element isn't the volume of data. It's about the quality and trustworthiness of the data that we rely on," he said. In an environment where pricing, risk models and trading strategies hinge on precision, flawed datasets can have cascading consequences.

"In our industry, where decisions are based on pinpoint accuracy, data sets with low accuracy rates aren't just inefficient, they create real risk and errors," Schwimmer said. He cautioned that "without the right data, even the best models or algorithms deliver mediocre or worse, misinformed results." According to him, poor-quality inputs increase the risk of "AI hallucinations, model drift, and unintended bias."

That risk dimension is particularly relevant as adoption accelerates. "Customer demand for our data has risen by about 40% per year since 2019," he said, adding that there is a growing appetite for AI-enabled analytics and automation across financial institutions.

At the same time, Schwimmer acknowledged that the industry is still in exploratory territory. "We are still in the early stages of seeing what impact AI will have on the financial sector and indeed on the global economy more broadly," he said. The transition will require structural adjustments. "We will need to adapt to new practices, new roles for our people, and new regulatory regimes."

He underlined that governance must evolve alongside innovation. "Critically, we will have to provide and maintain the integrity of the data that powers artificial intelligence," he said.

Schwimmer positioned AI within a broader transformation that includes distributed ledger technology and the growing integration of digital assets. "After several years of experimentation and proofs of concept, we are now witnessing and at LSEG helping to drive the integration of digital capabilities and the growing usage of digital assets across the financial sector," he said.

Schwimmer concluded by saying AI will not simply enhance existing systems but redefine how capital markets operate. The challenge for institutions, regulators and policymakers will be to harness its productivity gains while safeguarding accuracy, transparency and trust.