An impromptu conversation about electronic trading and its AI-based future, how to expand to hedge funds and wealth managers, the difference between progress and nonsense, and a late night multi-faceted trip to Manchester. This week’s industry interactions were very good ones and are worth a good read
In this weekly series, I look back on what stood out, what was bemusing, amusing and interesting during my weekly travels, interesting findings within the FX industry and interaction with an ever-shrinking big wide world. This is purely observational and for your enjoyment.
Monday: The ‘convenient’ future of AI
It is often surprising who one meets purely by chance, especially when the leaders of the electronic trading industry are widely dispersed geographically, maintaining their close relationships via digital methods.
The daily interaction via messaging systems which in some cases operate entire business units remotely has given rise to the friendly interactions and commercial decisions between many well connected executives being conducted without face to face contact, however occasionally a familiar face is stumbled upon without prior arrangement.
This Monday, I was standing at the front of an Airbus 320 with central Europe 30,000 feet below passing by at 500mph waiting to use the single convenience, when I heard “Hello Andrew” from an equally patient Tal Zohar.
This was an opportune moment to catch up with the London-based former IG Group senior executive who now operates Artudata, an artificial intelligence (AI) initiative which, at its launch just over a year ago, was aimed at retail brokerages.
It was interesting to catch up with Tal, as during our impromptu conversation he shared some perspectives that I concur with and have demonstrated on these pages over the past few weeks, one of the main aspects being that the electronic trading sector and its suppliers, ancillary service providers, technology vendors and liquidity partners need to spread their wings further than the MetaTrader based retail FX brokerages on Cyprus.
“We have begun to work closely with insurance companies, pension providers and consumer-focused financial services companies, and I think that is really the future for people developing technology which helps retail customers either manage their finances or trade markets properly” said Tal.
He explained that his new AI company, Artudata, has experienced a lot of diversification and has become popular with domestic-market insurance providers, life assurance firms and generic financial services firms with their own IP and platforms, and has also begun to look toward integrating with new financial platforms in Singapore as well as London.
We mused the method of expansion that firms in this industry should take and it was refreshing and interesting to hear Tal’s position which echoes mine entirely, in that the ‘new age’ of firms that are now emanating from London, providing application-based touch-of-a-button financial services and market access to new customers in sensible environments is the way to evolve our business rather than chasing the stagnating and often ill-equipped and obsolete lead-buying dinosaurs in the non-mainstream financial markets centers across the Mediterranean.
Having left IG Group in early 2017 to join London Stock Exchange’s ELITE division, where he became Head of ELITE Connect and a member of the ELITE management team, Tal gained a senior position within one of the world’s most renowned electronic listed derivatives executing venues and reference points for publicly listed blue chip companies is to support private and public companies connecting with capital using the digital technology.
Artudata, which was developed and is operated by that specific division put Tal on the board of ArtuData, which was established with the intention of boosting marketing and sales of retail financial services companies, with focus on brokers.
Artudata’s perspective on full automation of the financial services sector is that “Artificial-Intelligence (AI) empowered eBay to predict what we should buy before we know it. Facebook tells us who should be on our friends list and what our interests should be. LinkedIn tells us what our next job could be. Google predicts what we are searching for. Waze decides how we travel and much more. Banks decide who receives a loan. Governments predict who will commit a crime. Cars makers predict who could be involved in an accident and hospitals use AI to decide who is at risk of contracting a disease and how they should be treated. The message is clear.”
“Organizations using cognitive AI tools have been growing both in strength and impact whilst most SME’s underperform and simply struggle compete.”
Artudata told FinanceFeeds that SMEs should have a fair opportunity to grow, and in this Knowledge era, businesses need AI. The company states that the playing field is evolving and that the company began working tirelessly to give SMEs the chance to regain their competitive advantage and the best part about it is that the more businesses that join, the more powerful the AI becomes.
One of the firm’s initial tenets is that AI is cognitive and is constantly learning, making this an integral part of how companies providing such as ervice are able to instantly identify opportunity and real value.
Once again, it is certainly time that the expertise that has built the FX industry into such a technology-focused and leading edge development environment was expanded to higher quality financial services institutions and initiatives.
Tuesday: Ramy Soliman agrees.
After touching down in London, I thought more about my mid-flight conversation with Tal Zohar, and on meeting with some of London’s institutional prime brokerage executives, the same subject became a forefront of topics.
At Stater Global Markets head office in London’s Square Mile, the company’s CEO Ramy Soliman agreed that genuine prime of prime brokerages with genuine liquidity relationships for trade execution with Tier 1 bank prime brokerages for margin trading, of which there are only a handful in the world, Stater Global Markets being one of them, should look toward elevating their target market to larger entities.
Stater Global Markets’ 2018 was a period of growth and Mr Soliman attributed some of this to the company’s ability to use its sustainable capital base and Tier 1 liquidity relationships to develop prime of prime relationships with hedge funds and wealth management companies which is a great direction indeed.
I opined that there is no reason at all why institutional providers of liquidity and technology with a good level of capitalization cannot look to operate as liquidity providers to high quality non-bank investment managers and to the new age firms that are now offering retail financial services via their own flexible applications – once again, as an example, think Robin Hood, or Revolut.
These have high end customer bases and sustainable business models with their own intellectual property and are scalable beyond the affiliate marketing-orientated model of the MT4 white label which is anything but scalable.
Mr Soliman’s notable calm and sophisticated demeanor was ever present during our conversation, in which he explained that a move toward high quality client bases and provision of services to companies that are keeping abreast with the latest developments in FinTech and requirements of modern customers, as he looks forward to a year ahead of working closely with institutional hedge funds and new technology led retail trading firms across the world as the year unfolds.
Very encouraging to see our business heading in that direction, and Mr Soliman’s senior level expertise at pinnacle firms such as Citigroup, IG Group and Integral Development Corporation mean that he is certainly in a position to gauge how the entire component system of our business should work from prime brokerage to integration provider to large retail broker, and how to scale the future development of the entire industry.
Clearly, there are other proponents too. Mark Ackred, a former CMC Markets and Think IS executive, founded Dabbl which intends to democratize share trading for retail customers, in which users can make unlimited trades for £1.49 a month via its own proprietary mobile application, with the firm applying a 0.25 per cent each year for accounts valued above £7,500.
This is the way the business is going, and that is a good thing indeed.
Thursday: Oh do pipe down!
Another easyJet flight, this time heading for a midnight landing in Manchester, in my fondly remembered heartlands of North West England.
The usual array of well organized and courteous members of Manchester’s flourising and ever expanding Jewish community filled the entirety of the late-night journey, and it was time to relax and enjoy a weekend which promised to be even more than a trip down a very welcome memory lane.
It was exactly that, however there was just one fly in the ointment, and yes, it was just one passenger, who, yes – you’ve guessed it – spent at least three out of the five hour flight incessantly rambling at high volume about virtual currency and blockchain to the poor unsuspecting Mancunian passenger to his left, who deserves a Nobel prize for patience as he tolerated this one way diatribe of utter nonsense whilst the ‘victim’ had to metaphorically turn his back on two of his nine children who were sitting next to him.
This irked me because it was another example of the foaming-at-the-mouth, evangelical nature of the Bitcoin and ‘cryptocurrency’ bandwagonists whose sole purpose is to go about, rather aimlessly, with no substance, commercial acumen or background, verbally broadcasting to absolutely any living human who will tolerate it, be it in a supermarket or an airport lounge.
It is because of this that we can all be clear that there is no possible future for virtual currency, blockchain databases or any form of digital asset other than as a sideline for mavericks and purveyors of verbally delivered horse manure.
During the appalling one-way sound wave-conveyed deliverance, the recipient, a gentleman with nine children who clearly was an upstanding individual indeed and had clearly achieved far more success in his life than his aural assailant, said nothing .
On opportunity, I clocked a glance at the Bitcoin proponent, who turned out to be a disheveled looking oaf among civilized people polluting the cabin with high decibel absurdities in a thick Eastern Mediterranean accent about his invisible mansion and interactions with secret services and the KGB.
Let’s make this clear and put it all to sleep, so that people like this can go to sleep and then let me go to sleep at 11.00pm during a night flight.
We have had 10 years of dreamers and felons hawking their crypto-orientated contrivances ranging from Bitcoin exchanges that have stolen all of their client’s capital and disappeared, to underworld market places whose IP is now owned by Uncle Sam’s department of justice, to ICO con men who have shapeshifted from affiliate gaming marketers to gambling site owners to binary options felons to ICO and crypto cartels, all of whom have spouted much tosh and furthered the cause of nothing .
The future? Oh do pipe down, 10 years of nonsense is enough to show you it’s not got any substance. Anything genuinely futuristic these days comes to fruition and then immediately becomes a mainstay with a good quality and educated client base in good quality jurisdictions without any founders or directors spouting endless balderdash to anyone who will listen for hours.
WeWork, Airbnb, hybrid cars, sustainable energy, Amazon, Deliveroo. These are just some generic examples which have the full backing of everyone and have genuinely changed the way we all do things. In the financial world, companies like One Account, First Direct, and of course today’s crop of new age investment platforms are genuine game changers.
These bitcoin Mavericks all live in a fantasy world, all the bravado I had to overhear about the KGB and undercover agencies during my precious rest time is testimony to that. The dull reality is that this is all fantasy and will never be anything else which is exactly what the problem with it is.
Look at other developments that actually were designed from the ground up to make lives better and improve everyone’s daily existence – they have been welcomed by governments and business globally and are often benevolent. In industry in general, there have been several milestone examples of this. Nobody has ever heard of Nils Bohlins, for example, however his invention has saved over 1 million lives and he did it properly by waiving his patent rights.
Nils Bohlins waived his patent rights in 1959 whilst working as an R&D engineer at Volvo in 1959. He invented the three point seat belt with an inertia reel – exactly the same system that still exists in every single car in the world – and he waived the rights to patent to ensure that others would benefit regardless of what car they drive.
The seat belt – a great success. The KGB dreamer and his Bitcoin brethren who are constantly posting inanities on business orientated social media which propagates their dreams but achieves nothing except empty bank accounts, arrests and reputation damage to anything financial or technologically driven.
That result is absolutely the opposite of anything futuristic or leading edge, and is utterly regressive. It is the opposite of benevolence and the opposite of progress , and the biggest platform for male bovine defecation that I have seen since I began my career almost three decades ago.
So Mr disheveled loud-mouth, enough balderdash, Now let me sleep.
Friday: Manchester at last
A weekend of R&R for me, and a large scale family gathering as many of my favorite family members arrived in Liverpool. My overnight in Manchester airport led to a short drive to Liverpool until Monday night.
Manchester is a far cry from its original post-industrial state forty years ago. It is ultra modern and has a very good quality university.
Salford Quays is no longer the desolate state owned poverty trap that it used to be, instead being home to the BBC’s worldwide headquarters, and a plethora of ultra-modern technologically advanced companies, some of which provide services to the financial sector, and a large number of astute, highly educated professionals.
Yet a three bedroom house in a very good area in North Manchester is still only £200,000. It is the UK, so it has the FCA as a regulator, top quality business environment and is a short train ride from, and is in the same jurisdiction as, London – the world’s powerhouse for everything.
Post Brexit, many of us could do worse than set up office in Manchester, especially those who are young and are on the computer science side of our business, developing institutional liquidity aggregation systems or simple to use apps for retail-focused mobile platforms.
I’d do it, it makes a lot of sense.
Now, off to Liverpool, where no development of that nature has taken place. But I do not mind, Liverpool will always be Liverpool, and that is good enough for me.
Wishing you all a super week ahead!