How does HSBC AI Markets differ from other offerings of the same ilk on the street?
Li: I believe HSBC AI Markets is different because of the breadth and the quality of the content that it generates, including the data, the analytics, the pricing and the execution. What’s quite interesting is how we bring this all together under a single portal for people to access using natural language processing. Bringing that data and those features into one single place where people can use it smoothly, seamlessly, is quite unique in the market.
We launched HSBC AI Markets for clients in 2023, initially for financial institutions and, now, large corporates. There has been a lot of positive client feedback about how this compares to other platforms and what they can get from this platform that might not be available elsewhere — whether that’s in terms of certain functionalities and certain data sets they can get, the way it’s designed, or how it fits into their workflow.
What makes the data set unique in what it offers to the street?
Li: We’ve been building HSBC AI Markets for the past seven years so a lot of work has been done to build that strong foundation of data that the bank has generated. We are a market maker with a global footprint in a lot of different asset classes; in many of those markets we have a very significant presence. That position naturally gives you those data sets that some other competitors might not have.
The second factor is how HSBC AI Markets turns data sets into actionable insight that is accessible by natural language processing. Most mainstream platforms do not use a chat interface that we have developed for clients and there’s still more to come as we add new capabilities to HSBC AI Markets.
The third element is the ability then to consolidate the data into content and actionable trading ideas. The NLP very easily brings data sets together. Being able to pull those data sets via one single portal in a way that you can link them together is essential. Nobody makes a trading decision by just looking at one single number. If you don’t have such a system such as HSBC AI Markets, you’d have to source all the data you would need from several places to form the trading ideas in your mind.
How do you see traders using this in their execution workflows?
Li: Traditionally, what happens is a client contacts a salesperson who then goes to a trader to get a market price and, in some cases, they may have to come back with multiple different strategies. That process can take hours. But, once you put all of those capabilities into one single place, as is the case with HSBC AI Markets, it’s just one instruction or question you send using NLP, and you might need to wait a couple of minutes because there is a lot of computation behind the scenes, but that’s minutes compared to quite a few hours. The efficiency gain that we see is very significant.
And, by adding an execution tile to HSBC AI Markets, this provides clients with market cross-asset analytics all the way through to execution and post-trade intelligence. Currently, clients are able to do FX execution on HSBC AI Markets, but we’re looking to roll out other asset execution offerings in the near future.
For traders, they can access real-time events, data, implied risk for central banks, and pricing for different hedging strategies all in one place. The platform is really useful for quite a few different trading strategies.
What kind of metrics are you using to track performance using HSBC AI markets?
Li: The most direct metric would be electronic execution volume by HSBC AI Markets, because at the end of the day this is a trading platform. We also track the active number of users of the platform because there will be cases where we provide those services on the platform but clients might trade via other channels with us. The final metric measures how people are using HSBC AI Markets – their level of usage over time and how sticky they are – whether they keep coming back.
What have been some of the takeaways that you’ve learnt in developing this product?
Li: We started this about seven years ago as an internal tool on the trading desk but primarily it started just as a pricing automation and risk management tool. The biggest takeaway or lesson I have from this journey is that internal tools can actually become transformative for our client solutions. What started as an internal tool for traders evolved into a comprehensive external market intelligence platform for clients. It reveals that a product designed for internal efficiency can unexpectedly become a highly valued proposition for our clients.
The second takeaway is that whilst we offered HSBC AI Markets to institutional clients initially, we have also started to see the breadth of use cases expand, particularly on the corporate side.
The last lesson would be that automation doesn’t just replace manual processes. The real benefit is that it changes the decision-making quality. There are a lot of examples where traders didn’t have these capabilities before and found they had limited capacity during the 10 seconds they might have to make client pricing. By automating these elements, it helps boost decision-making quality.
You can be super quick, but at the end of the day you still need to produce quality output. You need to be reliable. Our industry is a place where quality and accuracy matter a lot. That’s also why we put a lot of effort in to ensure that the results users get from HSBC AI Markets are accurate, reliable, and audit proof.
The power of HSBC AI Markets is taking efficiency and insight to the next level.
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