When it comes to trading desk design there is no one-size-fits-all approach, but there are still real opportunities to maximise success, Eric Böss, global head of trading at Allianz Global Investors, told The Finance Hive’s CMX conference attendees.
Heads of desks almost never have the opportunity to build a desk from scratch, with established processes deeply steeped in structures and strategies. However, there are key considerations when it comes to what exactly should be prioritised when it comes to enhancing desk operations.
Creative hiring was flagged as the key tactic for adapting to constantly changing environment and leveraging AI effectively.
A desk requires people who are able to articulate themselves person to person as well, in large part because explaining tech is increasingly important as innovation ramps up, explained Böss.
Those who are willing and able to work with machines and not be afraid of being replaced by them are set to be key.
“If you hire creative people, there’s a higher probability that your work processes will be too. Creative people are needed because the environment we’re working in is constantly changing.
“The combination between a creative team capable of communicating amongst each other and the street, and the PMs using the right technology, is what I would aim for if I were to build a desk from scratch.”
Be tech-savvy
When it comes to technology and data management, its importance cannot be overlooked, and remains key.
Böss highlighted the importance of hiring tech-savvy personnel at desk level, including data scientists, tech traders, and IT specialists, in a bid to bridge the gap between technology and human.
Going a step further, the collaboration between these parties was also flagged.
“If you can afford it, have someone at the desk who helps you with technology. They can help you with extracting the best parts of the system […] The interaction between data streams and the humans working on the desk is also increasing.”
With this in mind, he further reminded that the focus is oftentimes shifting to asking right questions rather than coding ability.
Remember the human touch
Extending the conversation to artificial intelligence, Böss was sure to remind those gathered that human touch is unavoidable, with AI alone having the potential to become “extremely dangerous”.
“If you read articles in the recent months about how manipulative some of those AIs are becoming, it’s actually extraordinarily interesting because we’re just at the beginning of this phase of development. It’s something that thinks and works and acts like humans, but is clearly not human […] You really have to work with your technology now.”
He further shared that recent stats had shown for a fact that the most effective and efficient processes are those which combine human and AI efforts, with neither being stronger alone and the task at hand instead being to leverage the best qualities of the joint skillset.
“Human minds learn, and so do machines – they digest data, they find patterns and are super good at being fast, being precise, discovering patterns.
“However, humans are terribly good when it comes to unknown environments and connecting the dots, which is very helpful because we’re not working in science, we’re working in financial markets.”