The TRADE TRADETech Daily 2018 - Page 22

THETRADETECH DA I LY THE OFFICIAL NEWSPAPER OF TRADETECH 2018 Increasing intelligence Kenneth McLeish, head of equities trading technology, JP Morgan Asset Management talks to TRADETech Daily about how the firm is using the latest advancements in machine learning and artificial intelligence (AI), and what he’s looking forward to at this year’s TradeTech conference. How closely is JP Morgan Asset Management working with AI? Kenneth McLeish: Intelligent analysis of data has always been core to how we do busi- ness. As volumes of data have exploded it’s demanded even more sophistication in the analysis of data. Machine learning and AI is a natural evolution. In what ways can AI technology improve trad- ing desk operations? KM: AI can solve a variety of problems, partic- ularly in the context of trading desk opera- tions. AI can, for example, be incorporated into tools that increase the effectiveness of traders and, conversely, come up with solu- tions where traders aren’t required to handle orders at all. Around 40% of our flow is currently handled autonomously. Our predictive “Every time we execute an order, the machine can learn from the decision and automatically know what to do next time around. This helps to remove trader bias from the equation.” machine-learning platform can take orders, categorise them and choose the best way to execute them. Every time we execute an or- der, the machine can learn from the decision and automatically know what to do next time around. This helps to remove trader bias from the equation. With so many firms now claiming to be working with the technology, how do you distinguish which FinTech firms are truly leveraging AI? KM: It’s easy to get enticed by the sophistica- tion of a new technology. The key is to focus 22 THETRADETECH DAILY on outcomes. Whenever we adopt new tools or processes, we must ensure they are mea- surable, repeatable and remain focussed on the value of the outcome(s). It doesn’t matter how good the marketing is if it doesn’t lead to a quantifiable improvement. What do you anticipate the hot topics to be at TradeTech this year? KM: With MIFID II adding complexity and demanding higher transparency, I anticipate this will lead to discussions around addition- al efforts to make trading processes more systematic. That may in-turn lead onto the potential for greater adoption of big data and AI in the trading space. Are there any sessions in particular you are looking to seeing? If so, why? KM: I’m particularly interested in the “Drag- ons Den” session for Fintech firms. Being part of JP Morgan Chase gives us incredible scale and shared knowledge, but we are equally in- terested to hear and learn from others. Small start-ups often provide a different perspective and often have creative solutions to problems.