e-Forex-Nov-23

Next generation FX analytics: Bringing transparency and more to the FX execution process
TRADING OPERATIONS
“By accessing independent anonymised datasets, an LP can
proactively optimise their pricing on a client-by-client basis
resulting in better outcomes for both the client and the LP.”
Phil Morris
the live price data direct from the
source, without knowing what the
EMS does, there is only a limited set of
conclusions that a trader can reach,”
he says. “Only the most obvious and
egregious costs can be spotted, and
the refinement that exists in the detail
is lost. We do not see others putting
in place the necessary foundations to
make unbiased, informed, and timely
trading decisions.”
A ROLE FOR AI AND ML
Can AI and ML play a role in bringing
context and simplifying analysis here?
Lambert says yes, but with a few
caveats. “Their success will rest on the
quality of the data that is available to
them,” he says. “We know that with
a model it is always a case of garbage
in garbage out, and that is true with AI
and ML too.”
Hopkins agrees and adds more
nuance. “It is important to recognise
that AI is not a silver bullet,” he says.
“The point of execution analysis is
to provide insight and transparency.
Deploying black-box algorithms
to the analysis process that no
one understands introduces an
“explainability” problem. This moves
the opacity from the trading process
to the analysis process, which doesn’t
solve anything.”
However, he concedes that AI and
ML have highly exciting use cases.
“It is an area that FairXchange has
invested in significantly,” he says.
“Guided by appropriate experience
and domain expertise, and based on
THE ROLE OF THE LIQUIDITY
MANAGER CAN BE AUTOMATED
TO A CERTAIN EXTENT BY AI
30 NOVEMBER 2023 e-FOREX