Matthew Hodgson : Founder & CEO of Mosaic Smart Data
Matthew Hodgson : Founder & CEO of Mosaic Smart Data

ML and Predictive Analytics: Where data driven learning interacts with FX algo trading

It’s little secret that FX businesses in many banks are struggling for profitability and adequate ROC. Coupling this with increasing regulatory data management requirements further darkens the picture. However, as Matthew Hodgson – Founder & CEO of Mosaic Smart Data - explains, there is actually a major opportunity implicit in this situation. If done well, machine learning technology, particularly in the realm of anomaly detection, can significantly enhance profitability across a firm’s FX business, including powering automation.

First Published: e-Forex Magazine 88 / ALGOFX LAB / September 2019

Regulation: drawing opportunity from necessity The past few years have seen a raft of legislation, such as PSD2 and GDPR, that directly affects the banking industry. A significant proportion of this regulation includes regulatory requirements specific to data, with one example being the BCBS 239 standard within Basel IV, which requires banks to meet specific standards relating to risk data aggregation. Compliance with this (and other) data-related regulation is clearly not optional. However, if undertaken in the right way, it is also possible to derive major business benefits at the same time. This applies across the banking enterprise in general, but is particularly relevant in FX businesses, where extreme cost pressure is now the norm and profitability is depressed - both of which are driving a need for automation.  The critical point is how data is managed and stored. An ideal implementation is one where diverse data classes and formats become completely clean, consistent, normalised and...continued

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