Conference Dailys TRADETech FX Daily 2019: Wrap-up | Page 7

THETRADETECHFX DA I LY
key takeaways
resist change and building trust is a vital
component of the introducing automation
into the execution process. Such is the price
of progress.
Data makes the world go round
Discussions around automation and artificial
intelligence technologies always lead back
to one thing, the foundation upon which
all good tech is built: data. The buy-side in
particularly have spent a good chunk of the
past few years talking up the important work
they are doing with their historic and current
data sets, as well as seeking out new sources
to improve performance and outcomes.
One of the key phrases you’re likely to hear
at any industry conference is “data is the new
oil”, although this is somewhat misleading.
It’s an easy shorthand comparison to make,
but data is far more complex, voluminous and
changeable, and can yield greater results the
more that it is used. Buy-side firms have, or
in some cases are now starting, to wake up to
this idea, having realised that spending mil-
lions on the latest tech systems is a redundant
endeavour if you cannot supply the system
with the right data.
In the FX space, alternative data is now
coming into the foreground, as asset manag-
ers look for any competitive edge they can
(and perhaps to justify their increasing spend
on AI and other analytics systems). While it
can be harder to source alternative data for
FX, in comparison to equities say, these data
sets can take the form on historic flow and
tick data. Traditional, larger data vendors
are now offering alternative data sets to the
market, alongside niche providers, brining a
degree of reliability for the sceptical.
Algos all the rage
If you had chance to pursue the TradeTech
FX Daily edition at this year’s conference,
you may have noticed that much of the
content was focused on the uptake and use of
algo trading in the FX markets. This was no
coincidence. While algo trading in FX may
still lag behind its equities counterpart, one
keynote speaker cited that FX algo trading
is on the rise, with around 15-20% of market
trades now executed via algorithms.
The agenda at this year’s event was
brimming with algo chat and conversations
regarding automation or market electron-
ification also skewed towards low-touch
trading, as buy-sides explained how they are
deploying these systems and those on the
supply end sought to analyse the state of play
from a higher perspective.
However, one panel that took an in-depth
look at the state of algo play in the markets
discussed the paradoxical situation that algos
present, in terms of offering firms both sim-
plicity and complexity (see page X for more
on that). Meanwhile other conference partic-
ipants argued that algo sell-side providers are
not doing enough to engage with the end user
community on what is actually required from
these systems, leading some to a sense of
indifference or distrust, while others called
on investment banks to step up to the plate to
fill the gaps in the market. try works and dispel the historic myths goes
a long way towards changing perceptions
about capital markets’ firms.
Diversity rises up the agenda At last year’s TradeTech FX Europe confer-
ence one of the major talking points was the
role of conflict and risk, primarily driven
by the US President’s penchant for Twitter,
the United Kingdom’s ongoing (and farci-
cal) departure from the European Union,
geopolitical and economic instability in Italy,
Turkey and Latin America, and of course the
escalating skirmish between the USA and
China, which has since turned into a full-on
trade war.
The feeling at this year’s edition of the
conference however seemed to be one of
acceptance, the global and economic uncer-
tainty, or at least more than the status quo,
was now just another part of daily life for the
five-trillion-dollar global FX markets. There
were some weary comments about how the
US President is able to move markets or set
serious alarm bells ringing in the FX world
with just a tweet, but there was also ac-
knowledgement that the best course of action
was to simply get on with the job as best as
possible.
Of course, that doesn’t mean that there
isn’t more change coming down the pipeline.
There was focus on the upcoming uncleared
margin rules coming into force in September
2021 and how that will impact the FX buy-
side contingent. But for now, at least, daily
uncertainties are just another fact of life.
One of the main criticisms of any financial
industry conference is the lip service that
speakers and delegates often pay towards the
hot button issue of diversity and inclusion.
It’s not enough to have a breakfast briefing or
an invitation-only session stuffed away in a
corner of the agenda; these discussions war-
rant a place on the main stage and be open to
all to engage with.
This year’s TradeTech FX Europe confer-
ence took this approach, opening its second
day with a diversity and inclusion discussion
panel. Moderated by diversity champion Ju-
lia Streets and featuring speakers from DWS
Group, Vanguard and German asset manager
MEAG, the panel mined how firms can work
towards increasing diversity of thought to
achieve better trading outcomes and internal
processes, rather than just work towards
hitting mandated quotas.
In the context of a shift from shift away
from individual portfolio management
towards a team-based management approach
where a variety of input leads to better
outcomes, embracing the well-documented
benefits of diversity seems like a no-brainer
for both this generation and the next. One
of the key messages from the panel was that
firms must start their work in this area early.
Going out to schools to show how the indus-
Uncertainty now just a fact of life
The official newspaper of TradeTech FX Europe 2019
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