Trader TV spoke with industry participants on the sidelines of this year’s Fixed Income Leaders’ Summit in Boston about their key takeaways from panel discussions and roundtables focused on scaling AI and automation across investment and trading workflows. Participants highlighted the importance of industry-wide collaboration, stressed the need to measure AI initiatives against tangible business outcomes, and examined the continued caution surrounding the automation of complex fixed-income trading. They also debated whether achieving greater scalability lies in partnering with third-party providers or leveraging in-house technology capabilities.
Interview
Josephine Gallagher – Hello, I’m Jo Gallagher from Trader TV, and we’re here at the Fixed Income Leaders Summit in Boston. I’m joined by David Litchfield from Cboe. David, lovely to speak to you today.
David Litchfield, Cboe – Very good to speak to you too.
Josephine Gallagher – Excellent. So, you are going to partake in some round tables this afternoon at the first Buy Side Day. So, tell us, what are you most looking forward to from that?
David Litchfield, Cboe – It’s always my favorite bit of the conference, because, of course, everything on stage and the information sharing in a big group environment is important, but then the round tables is an opportunity really to get close with some buy-side participants and really exchange some sort of views in a very intimate setting
Josephine Gallagher – So I’m here with Krishna Gottipatty from Simon-Kusher. Hi lovely to see you.
Krishna Gottipaty, Simon-Kuchner – Jo, nice to be here, and nice to meet you.
Josephine Gallagher – Lovely to meet you as well. So you were just on the recent panel around automation and scaling automation. What were your key takeaways from that?
Krishna Gottipaty, Simon-Kuchner – There were actually a lot of takeaways, and it was actually fairly riveting conversation amongst all the round table participants. If there was one thing that really boiled up, I would say it’s around what are the outcomes around automation, right? How are traders and portfolio managers, and so on, thinking about outcomes, and that was, I would say, a common theme that came across them, right. And what I would say is, for any firm, you really have to look at outcomes in a three-dimensional way, right? So, three different areas. What are you thinking about from a business outcomes standpoint, right? The revenue impact, number one. Number two is the cost side of the business, right? So, are you able to reduce costs, or, you know, maybe there are other efficiencies in play? And number three is risk. Are you able to kind of drive down risk? So, ultimately, the management teams and the boards of asset managers are really going to be asking those questions, and it’s critically important that, as automation and AI, as firms kind of tackle this, they have a sense of how any one of these use cases will drive towards those outcomes, because ultimately, you know, it’s about ROI, right? There’s no such thing as endless spend for the sake of it.
Josephine Gallagher – Lindsey, thank you very much for joining us. So, you obviously have just been sitting in on the buy side day, and one of the big panels that you were in there was on scaling automation. What were some of the key takeaways from that?
Lindsey Spink, American Century Investments – People really want to talk about AI, obviously, but I don’t think that’s at the core of what’s going on in automation in the fixed income space. You can see there’s a fear just on the audience questions and their responses to our surveys that half of the audience is very comfortable with automation and zero touch, and moving their probably more liquid flows, treasuries, futures, FX to a more zero touch ecosystem, but there’s a reticence and reluctance to the higher spread, sort of, you know, more trader involvement being automated at all. So you know that was one thing I took away from it. It was interesting. I thought the number would have jumped to much more all in this year, but we’re still in that resistance place.
Josephine Gallagher – So we’re here at Fixed Income Leader Summit, of course, but we are hearing so much from the different types of panels that have already gone on today. What are some of the kind of key takeaways you’ve taken so far?
Stephanie Fraser, Baillie Gifford – Sure, so I was just at a session just before lunch about automation and scalable workflows, and I think for me my biggest takeaway from that was actually we’re in quite a good place at Baillie Gifford, having our own internal OMS (order management system), so I’m not sure I’ve always thought that. You know, we’ve got multiple asset classes, and we’ve been looking for a vendor solution for some time. We keep revisiting this buy versus build, but I think as a whole AI conversation and being able to use the large language models get even better. I actually think that puts us in a really good position. We’re all trying to work out how to get our unstructured data into a way that we can send them into these vendors, but actually having it in-house now could be, could be the secret sauce. So, yeah, it’s actually given me some confidence of where we are.
