e-Forex-July-23-HighRes-SCREEN

FINTECH
Cutting through the hype:
Where AI is already making
its presence felt in FX
Artificial intelligence continues to extend its influence over FX. But despite advances in areas
such as conversational interaction, no one expects the machines to take over any time soon.
Paul Golden investigates.
Paul Golden
The extent to which artificial
intelligence is utilised across the
FX market is hard to quantify. One
commonly referenced statistic is
that around 90% of traders use AI
and applications such as predictive
analytics as part of their wider trading
strategy.
What can be said with certainty is
that banks are increasingly integrating
the technology - and associated
technologies such as machine learning
and natural language processing - into
their trading platforms.
For example, in May 2023 HSBC
launched AI Markets, a digital
services offering that uses purposebuilt
natural language processing
to improve institutional investors’
interaction with global markets.
This functionality can be divided into
three categories, the first of which is
digitisation of single tasks with a rigid
communication interface between
machines, and between machine and
humans where the challenges are to
bring these functions together to build
a complex system for complex tasks,
and communicating with that system.
Developments such as ChatGPT
and the evolution of large language
models bridge this gap and make
the next category of functionality -
conversational interaction with data,
models, and systems – achievable with
the next few years according to HSBC,
which expects the third category (large
conversational intelligence) to become
applicable to trading within the next
3-5 years.
The broker community was quick to
embrace AI, with most FX brokerages
having integrated the technology
into their platforms over the last few
years to help trading clients who don’t
have access to expensive tools such
as Bloomberg/Refinitiv terminals to
make more informed decisions. As
well as delivering real time and market
analysis, AI is also being used to enable
copy trading.
MT5 traders are able to use ONNX
(open neural network exchange)
models in their platforms, while
FlexTrade Systems recently introduced
AI-driven functionality in its multi-asset
execution management system that
traders can use to ask verbal or written
questions such as ‘what is the value of
my Swiss orders over 10% ADV?’
OECD PAPER
A paper published by the OECD
in 2021 (Artificial Intelligence,
Machine Learning and Big Data in
Finance: Opportunities, Challenges
and Implications for Policy Makers)
outlined the opportunities and
challenges presented by the use
of these technologies in a trading
environment.
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