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It was not surprising that the most important points of discussion were once again artificial intelligence and data. Buyside has clearly jumped on the bandwagon, but is aware that changing market structures and the big question mark of Brexit mean that nothing can be taken for granted.
Artificial Intelligence (AI) was once again one of the main themes of the conference, although the initial enthusiasm was now clouded by the realisation of how much work had to be put into these technologies before quantifiable results could be achieved. The Buyside probably agrees that AI will become a necessary part of trade and that underestimating this requirement would be a fundamental mistake. Obviously, the industry is aware of the benefits that AI and machine learning can bring to retail beyond simple automation processes, but it just takes a lot of staying power.
Another current topic was the use of the huge amount of data available to the Buyside and possible ways to create value from it. More and more asset managers are hiring data scientists to work with their trading teams to provide more insight into both trading and post-trading. The importance of data analysis is also growing.
Alternative data - such as social media feeds and blog posts - were seen as one of the more lucrative new data sets for the buyside, but, as with any new technology, participants who have been working in the field for years warned asset managers that significant investment would also be needed to make greater use of it.
The big cloud hanging over this year's conference was of course Brexit. With the delay of Brexit, market participants are still in abeyance, need to implement certain contingency plans early and put other strategies on hold until clarity emerges. Changing market structures, in part due to the introduction of new regulatory systems, mean that many market participants are treading water for the time being, trying to overcome the headwind as much as possible while gradually improving their trading processes and technologies. During the panel discussions, too, the question of how the Brexit event will directly impact the capital markets in the here and now was only a shrug of the shoulders.
Sources: The Trade, John Lothian