BST Awards 2018: Best Buy-Side AI Platform or Tool—Nasdaq
Few phrases have the buzzword cachet of artificial intelligence (AI) at present. It is, literally, the talk of the town at any conference. But while interest is high, few areas of trading have made as much use of it as market surveillance. And out of those, few companies are as advanced in their deployment of AI and its subsets as Nasdaq.
In its sell-side endeavors, the exchange operator has put machine learning technology into production on its Nordic exchanges and sold it to a number of other bourses. For the buy side, it has the Nasdaq Buy-side Compliance (NBSC) platform. Detailed fully in the write-up for its market surveillance platform category win for the same technology (see page 48), NBSC goes beyond most market-oversight platforms by allowing users to assess the behavioral aspects of trading by portfolio managers, to gain a truer picture of what is genuine activity, such as hedging, and what might be market abuse.
Much of this stems from Nasdaq’s 2017 acquisition of Sybenetix, and the incorporation of that company’s Compass platform into NBSC—a stated ambition for the acquisition was for Nasdaq to strengthen its push onto buy-side desks. But the beauty of the platform is in how it meshes traditional high-technology tasks, such as analyzing data, with the fluid and previously unmanageable activity of humans.
Using Function Resonance Analysis Methods, the system is able to determine cognitive causality for decision-making by fund managers, which is expressed through heatscoring to identify behaviors that are outside of the norm. For instance, if a particular portfolio manager is consistently beating the market, yet his peers using similar strategies and trading similar instruments are not, it can compare behavioral patterns in the past to determine if potential abuse is taking place. Similar logic can be applied to organizations and accounts to analyze trading behaviors and determine whether a case warrants further investigation.
“We were able to find behaviors that I would call in the gray zone, which, depending on how you set your alerts, you may or may not detect. Now with machine intelligence, that gives you much better coverage,” says Valerie Bannert-Thurner, head of risk and surveillance solutions at Nasdaq.
Outside of pure surveillance, Nasdaq’s Fair Investor Allocation Reporting module also allows firms to process transaction information for best-execution auditing, and for proving that assets are being allocated fairly and equally. Using machine learning, this can be done far faster than any human analyst could manage and could potentially alert compliance officers to unfair treatment of client accounts before it becomes a problem.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Awards & Rankings
Witad Awards 2024: Rising star (vendor) – data, engineering & product development—Roberta Bill, SmartStream Technologies
Roberta Bill, product manager at SmartStream Technologies, wins rising star (vendor) – data, engineering & product development, in the 2024 Women in Technology and Data Awards.
Witad Awards 2024: Technology leader of the year (end-user)—Sejal Shah, BNP Paribas India Services
Sejal Shah, director and head of Global Markets IT BNP Paribas India Services, wins technology leader of the year (end-user) in the 2024 Women in Technology and Data Awards.
Witad Awards 2024: Reference data professional of the year (end-user)—Ludmilla Morgunova, BNP Paribas
Ludmilla Morgunova, Java developer on BNP Paribas’ Referential Data Platform, wins reference data professional of the year (end-user) in the 2024 Women in Technology and Data Awards.
Witad Awards 2024: Vendor professional of the year (trading and risk)—Mina Wallace, SS&C Algorithmics
Mina Wallace, general manager and senior vice president of the risk management business unit at SS&C Algorithmics, wins the vendor professional of the year (trading and risk) in the 2024 Women in Technology and Data Awards.
Witad Awards 2024: Above and beyond award (vendor)—Susan Bennett, Tradeweb
Susan Bennett, managing director, global head of product marketing at Tradeweb, wins the above and beyond award (vendor) in the 2024 Women in Technology and Data Awards.
Women in Technology & Data Awards 2024: All the winners and why they won
WatersTechnology honored the winners of the 36 categories in the 2024 Women in Technology & Data Awards, who were announced at a sit-down lunch in London on International Women's Day on March 8.
AFTAs 2023: Best new technology introduced over the last 12 months (data & data services)—SS&C Aloha
Northern Trust: Improving transparency across the asset servicing market
Northern Trust won three categories in the 2023 American Financial Technology Awards. Paul d’Ouville, global head of technology solutions and servicing at Northern Trust, discusses his firm’s fourth consecutive win in the Best reporting initiative…
Most read
- Women in Technology & Data Awards 2024: All the winners and why they won
- Witad Awards 2024: Above and beyond award (vendor)—Susan Bennett, Tradeweb
- Fighting FAIRR: Inside the bill aiming to keep AI and algos honest