BUY SIDE

AI to improve performance of execution for buy-side

FinTech experts debated the role of FinTech on buy-side trading desks at event hosted by Liquidnet Labs.

By Hayley McDowell hayley.mcdowell@strategic-i.com May 19, 2017 10:45 AM GMT

Artificial intelligence (AI) is set to revolutionise the way buy-side trading desks operate, according to a panel of FinTech experts.

Speaking to an audience of buy-siders at an event hosted by Liquidnet Labs and The TRADE, Natasha Shamis, global head of product at Liquidnet, told delegates the buy-side has two main concerns.

“What we are hearing from our members is that the two biggest problems they have is the search for liquidity and the ability to protect and generate alpha,” she said.

Shamis predicted the use of AI and intelligent use of big data on trading desks will see vast improvements across execution performance.

“What’s going to be interesting is the use of AI and quant models to provide guidance on execution. When a model is constantly leaning from the outcomes of when you followed the initial advice, your performance will keep improving.”

The panel also discussed the use of blockchain technology and agreed the technology should be of interest to the buy-side, although it it unlikely to provide serious solutions for a few years. 

Another question posed to the panel was whether technology will eventually replace human traders, but the FinTech experts agreed this is unlikely.

Shamis said technology will not replace people, but it will be a combination of both and technology will automate manual processes for the human trader.

Vicky Sanders, co-founder at RSRCHXchange believes technology will be used to up-skill people, rather than replace them.

Tom Doris, CEO at OTAS Technologies, stated people will remain in the job because “the technology fades into the background once it works”.