A senior researcher at Goldman Sachs stated the banks increase in its research effort. Putting this down to hardware advances that suggest the technology is on the verge of a breakthrough. More importantly, he mentions the “possibility this becomes a critical technology.” This is the thought process behind many businesses effort to build a quantum computer including the algorithms and software to fully utilise it.

William Hartnett, managing director at Citi, realises the power of this new technology is ground-breaking in risk management and trading and went on to say “banks need to start learning how to harness it now.”

The main focus is aimed the Monte Carlo Simulations. A Monte Carlo Simulation is a prediction and forecasting tool where multiple outcomes are simulated with varying random variables. On a standard supercomputer, the algorithms are well known and documented. However, a quantum computer requires new algorithms.

A traditional supercomputer has a strict logic path it obeys when calculating the outcomes, whereas a quantum computer can compute multiple outcomes at once and select the most desirable outcome.

In terms of the finance industry, banks carry out these complex calculations to assess their overall risk positions and option pricing.

“Together, these calculations account for the bulk of the computing power currently used by JPMorgan Chase”, said Ning Shen, managing director of quantum research.

The hope that instead of overnight calculations for risk assessment, they will be completed instantly. The advantage being that real time quotes grant opportunities in a larger market.

Mr Shen added: “If you can recalibrate your models fast, you can give better execution to clients.” The same technology could also make it possible to optimise the investment portfolios of wealthy clients on a case-by-case basis, he said.

Quantum computing is far from the only technological advancement that could shake up the industry. AI can analyse huge amounts of data quicker than humanly possible making it efficient at spotting anomalies or opportunities.

Source: FT.com

Modelomni has been quicker in spotting the potential of Artificial Intelligence and developing highly sophisticated models. The fact remains larger Wall Street Companies struggle to adapt to newer technologies and do it fast, while the more dynamic and disruptive Tech start-ups are more agile and flexible and less burdened by hierarchy.

XTX employs no human traders while Ken Griffith’s, Citadel Securities has spent the last 4 years focusing on technology to challenge Wall Street Market Makers. Both viewed as huge success with technology the key factor.

Modelomni Technology Lab offers an efficient Portfolio Diversification Solution for Market Professionals, uncorrelated to Equities and Bonds.

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Modelomni Raison d’etre is to constantly deliver highly sophisticated technological solutions to our clients.

Research and Development never stops or decelerates.

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“Financial machine learning creates a number of challenges for the 6.14 million people employed in the finance and insurance industry, many of whom will lose their jobs — not necessarily because they are replaced by machines, but because they are not trained to work alongside algorithms,” Lopez de Prado told the U.S. House Committee on Financial Services.

During the almost two-hour hearing, lawmakers asked experts about racial and gender bias in AI, competition for highly skilled technology workers, and the challenges of regulating increasingly complex, data-driven financial markets.

Kirsten Wegner, Chief Executive Office of Modern Markets Initiatives told the committee “As further automation and AI capacity emerges, U.S. companies will need to innovate and invest in leading technology to continue to compete in a global marketplace”

She went to say  that the as the pace of technology quickens and companies continue to innovate, there will be further growth in automation especially in the Asset Management Industry. This is due to AI being used “for Know Your Customer services to understand risk tolerance, investment goals, and to help humans make more informed decisions, and deliver performance results in an increasingly competitive and global industry.”

At Swiss investment bank Credit Suisse, Laura Barrowman, chief technology officer, revealed that the company is retraining employees who have been replaced with AI. “Globally, if you look at cyber skills, I think there is a deficit,” Barrowman told Business Insider’s panel at the World Economic Forum.  “There is such a shortage of skills, and you need people who have that capability.”

In a report by Business Insider,  banks are already investing into automation through customer identification, mimic live employees and personalised insights. JPMorgan is cleaning thousands of databases to make room for machine learning tech. Citi president Jamie Forese said in 2018 that robots could replace as many as 10,000 human jobs within five years.

Modelomni Technology Lab offers an efficient Portfolio Diversification Solution for Market Professionals, uncorrelated to Equities and Bonds.

Modelomni Raison d’etre is to constantly deliver highly performing and sophisticated technological solutions to our clients.

Research and Development never stops or decelerates.

No emotions. Relentless 24 hours per day self-learning and self-correcting Supervised Machine Learning, Unsupervised Machine Learning, Deep Learning Neural Networks algorithms, 100% focused on performing one single task efficiently: Trade under strict conditions and with Risk Management at its core.

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