A key theme expected to be explored in multiple panels at the Fixed Income Leaders Summit 2023, is the role that artificial intelligence (AI) and automation plays in fixed income markets; with usage expected to grow alongside technological advancements.
In a panel discussing the ways in which technology can be utilised in today’s sustained rate hike environment, one panellist noted that AI has relevance in this space, highlighting that it is already being used in automation, particularly in the pre-trade process – with its use cases continually showing increased importance in fixed income markets.
“There are a few areas in which I see AI having a tangible impact as we go forward, especially with respect to liquidity provision. We all get consumed by a great deal of research each day. AI enables us to take that all in and pass it a bit more efficiently, alongside allowing us to understand the research better,” noted a panellist.
Elsewhere, the panellist stressed that AI has benefits when tackling the fragmented nature of markets today, which have axes and liquidity existing in various areas.
“The ability to take in intraday axes, indications of interest and other market information, allows us to generate market signals – giving us a better idea of where a particular bond or index is going to trade. AI also helps elevate what we can do with respect to dealer selection. Advancements within the area will help improve efficiency overall and make the process easier to manage,” added the panellist.
With fixed income volumes expected to continue to rise, the panellist noted that advancements in technology and the incorporation of AI will help manage platforms and ensure resiliency is maintained without the need to employ a large number of new traders.
Elsewhere, the shifting role of the trader was discussed in the panel, although it was emphasised that technological advancements such as AI will only aid humans as opposed to replace.
“Technological advancements influence who we employ and how we train existing employees,” noted a panellist.
According to the panellist, the skillsets of a trader have shifted more towards a systems or IT background, with market skills being taught on the job.
A panellist concluded that a blend of tech savviness and market savviness would be essential characteristics of the trader of the future.