For those inquiring minds, Worldwide Business Research (WBR) has released its newest Equities Leaders Summit series report, “Next Generation Trading – How AI and Machine Learning Will Empower the Trades of the Future.” The report is chock full of insightful data and commentary from the industry’s top thinkers as to what institutional traders are thinking and what they want from their brokers and vendors.
The report includes the insights of 100 Global Heads of Trading from buy-side firms across the USA to find out more about the challenges they’re facing and the innovative solutions being brought to the table.
The survey was conducted by appointment over the telephone. The results were compiled and anonymized by WBR Insights and are presented here with analysis and commentary by the Equities Leaders Summit community.
The report consists of several non-buy-side contributors:
Tereck Fares, CFA, Chicago Equity Partners
Roman Ginis, CEO, IntelligentCross
David Firmin, Head of Global Trading Research, Instinet
The comprehensive report delves into the areas of advanced technology in the investment process, implementing machine learning and artificial intelligence, harnessing Big Data, sourcing liquidity and monitoring best execution.
Some of the key findings in the report are:
- 54% of those surveyed said AI/ Machine Learning is having the greatest impact on portfolio management and investment selection.
- 40% said Artificial Intelligence and Machine Learning are a key part of our processes but they don’t depend on them.
- When asked where does the human trader need to still be involved, 60% said when sourcing block liquidity and 59% said when making decisions about crossing the spread.
- 17% said that the biggest challenge facing traders when sourcing liquidity was Exchanges and ATS’s technology and matching process. 14% said that Finding liquidity at specific cap sizes was the major issue.
- When it came to the top challenges in Best execution monitoring and evidencing, 48% said that understanding their order performance at the venue level was tops. Also, 47% said that Extracting better, more immediate 47% actionable insights from their TCA was a major concern.
- 43% of global heads of trading surveyed said they are currently changing the way they capture, track and analyze execution data, while a further 37% have already implemented this change.
- Two-thirds said they were asking for deeper and broader analysis from their brokers and 53% are Investing in more in-house quant analysis/skills training across the desk.
To see the full report, please click here