Full human control

We are being told that digital offerings disrupt the way we work. Some people already fear being replaced by robots and artificial intelligence in the nearer future, but cautiously deployed, machines can provide relief from repetitive administrative tasks, in particular from decision-making under uncertainty.

Human hand holding robot hand in a handshake. ©Pavlo, fotolia.com

We are being told that digital offerings disrupt the way we work. Some people already fear being replaced by robots and artificial intelligence in the nearer future, but cautiously deployed, machines can provide relief from repetitive administrative tasks, in particular from decision-making under uncertainty.

 

The problem. Imagine your hedging process. Usually it is a very individual process. Your objective is to protect your bottom line, your EBIT. The way you do this today is by procuring a financial product from your commercial bank – but which product? Shall it be a plain vanilla spot transaction, or is an option occasionally cheaper than a forward, because market participants underestimate a risk? Even a zero hedge is a decision. It’s the decision to »do nothing«

 

A Sputnik event. For 15 years, machines have proven to make super-human decisions under uncertainty. The algorithmic decision-making was initially applied to board games, among them backgammon. Backgammon players, which are in the midst of a game, do not only have to evaluate their own position, but also the opponent’s position. What’s the chance of my position, what is hers? And even more uncertainty is being contributed by the dice. In the end, under all these uncertainties, I must make a decision now, hoping it will attribute to my final objective: to win the game. The latest spectacular case when a machine won over a human champion took place in 2016, when Google’s AlphaGo beat Lee Sedol. Since, China awakened and changed their technology strategy. The machine’s super-human decision-making under uncertainty was their »Sputnik event«.

 

Why it matters. The very moment CFOs make a transaction, issue an invoice, close a sales agreement they must make a decision whether to hedge their risk at all and how to hedge.
But markets have become political and more uncertain than ever before. A CFO and her treasury department are merely able to crunch all market data to obtain where the market – the dice equivalent – will move. The econometric models provided by their commercial banks are equally weak predicting the markets. They are not suited to factor in qualitative data in addition to quantitative figures from the markets. And where bank employ personnel which paid to the highest possible levels, corporate clients often employ interns to execute their hedging decisions.

But HEDGE21 can do the magic.

 

A Sputnik for CFOs.

  • HEDGE21 makes the decision on behalf of their CFOs. It’s a systematic, mathematically optimal decision under uncertainty.
  • HEDGE21 supports the CFO rather than automating his work.
  • The CFO is in full control and can override the machine’s decision any time.
  • HEDGE21 can fully adhere to the CFO’s process rather than changing it.

Still thinking?

Contact us for a free trial and learn how effective it is to use HEDGE21.

EMEA

HEDGE21.com

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PO BOX 506672, Dubai

United Arab Emirates

Email: hello@hedge21.com

 


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