General Finance
Feb 24, 2025
Get to Know Gradient: Tim Nersten, Head of Strategic Business Development
Where were you before Gradient?
“I spent the beginning of my career in capital markets, specifically in electronic and algorithmic trading. Prior to joining Gradient, I was focusing on alternative assets like venture funds and private equity.”
What inspired you to join Gradient?
“The product and the team. Capital markets are incredibly rich in data but the bulk of this data often goes unused. I believe that Gradient’s technology has immense potential to change that.”
What excites you the most about the future of finance, data, and AI?
“I’d say I’m most excited about AI’s ability to analyze and interact with unstructured data sources. This has incredible potential for the finance sector.”
“I’ve witnessed data grow in importance immensely across trading, investment banking, and private equity throughout my career. Early in my career as a trader, I was really only focused on a small subset of data which was monitoring Bid and Ask prices of stocks. The first inflection point for AI in finance came when we started using available data to evaluate the quality of our trading using Transaction Cost Analysis. This gave us a barometer for how products were performing.”
“Later on, we began using data to measure the quality of performance, benchmark against peers, generate ideas, and much more.”
“Today, AI is sparking another inflection point when it comes to data in finance. There’s so much valuable data locked up in sources like SEC filings or investor decks and it’s eye-opening what the right technology can do with those data sources.”
What is one of the biggest implications for AI in capital markets?
“One thing that I’ve noticed throughout my career is that everybody always wants to do more with less and AI is perfectly positioned to make this possible.”
“This doesn’t mean that companies are going to trim headcount and lay off hundreds of employees. Most companies want to create a culture where every employee is doing high-level work as opposed to just sifting through data. AI can help repurpose existing employees to be much more effective.”
What is a common pain point in capital markets right now?
“Right now, there are too many people relying on muscle memory in the capital markets.”
“For example, consider a buy-side trader who gets an order for a million shares and needs to figure out how to work the order. If the trader is only familiar with working orders 50,000 shares at a time then that’s probably what they’re going to do. But, the optimal order size could very well be 215,000 shares instead of 50,000. AI can help provide some insight into domain-specific challenges like this.”
“Where AI comes into play is creating a higher level of logic for skilled people with niche domain experience to make more accurate decisions.”
What’s one of the biggest roadblocks to the implementation of AI?
“Domain expertise and regulation.”
“We’re still in the exploratory phase of AI adoption. Most companies are very interested in learning more about AI but need to learn more about how AI can be implemented alongside their existing systems.”
“Additionally, financial institutions need to meet standards for compliance and data security. If companies misstep – even accidentally – they’ll be punished by regulators.”
What’s a common misconception about implementing AI and is there a consistent framework?
“A common misconception is that AI only helps you automate tasks. Automation is a valuable function of AI. But, it’s also just a small portion of what AI can do.”
“We normally segment the framework at Gradient into either alpha or beta.”
“The alpha segment includes front-office activities like trading, banking, or research where AI can help bring a higher quality product to market or increase performance. The beta segment includes activities that help keep the business running like clearing and custody, settlement, legal, or compliance.”
“Once we’ve established the segment and use case for implementing AI it becomes easier to develop a framework.”
What’s one piece of advice for companies looking to implement AI?
“Do your best to find a partner in AI who can help you solve your pain points.”
“Many AI companies hand you the keys to an existing AI solution and let you try figure out how to drive what they’ve built. This can be very challenging. In the long run, it’s usually more beneficial to find an AI company that acts like a strategic partner who can help you figure out where to start and how to scale.”
Thanks for reading!
We hope that you’ve enjoyed this episode of Get To Know Gradient as we interviewed the Head of Strategic Business Development, Tim Nersten.
Interested in speaking with Tim about how a high-performing, cost-effective custom AI system could benefit your financial services business? Contact the Gradient team today to learn more.
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