Nomura advances AI trading platform for FX and fixed income

Over the next year the bank will converge its trading desk infrastructure to create a cross-asset class system

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AI power: one challenge for Nomura was getting the teams to interact and work together globally

Nomura is in the process of developing an artificial intelligence-powered trading platform for foreign exchange and fixed income and, as part of a multi-year global e-strategy, it has spent the last eight to nine months consolidating its trading operations to create a single front-office unit.

In May 2019, FX Week reported the bank had formed a new global team, combining expertise among specialists picked from quantitative modelling, IT and its artificial intelligence lab. The team is designing, testing and building e-trading capabilities that address client servicing and execution, as well as pricing, trading strategy and research.

Forming the team has been challenging, says Matthew Hampson, deputy chief digital officer at Nomura: “There are a lot of legacy practices within the organisation. The data scientists, the technologists and the quants were heavily siloed from each other.”

He says a particular challenge was getting the teams to interact and work together globally.

Over the next 12 months, Nomura will look to converge its trading desk infrastructure to create a cross-asset class platform, enabling functions such as auto-hedging, skewing, spreading and internalisation.

The restructuring saw Nomura cut jobs, and bring together its quants and data scientists under one business stream.

Nomura has hired more than 20 people for the global e-trading team in the last eight months, including Duncan Larraz from hedge fund Brevan Howard and Steven Grossman, who joined from KCG Holdings.

However, the revamp of the trading unit has not necessarily resulted in any cost savings, says Hampson, as the trading unit looked to spend on its talent. “We’ve seen a lot of change over the past eight months and now have a smaller, higher-quality team in place,” he explains. 

Nomura is also developing a graduate stream as a long-term strategy to help develop talent from grass roots.

Hampson was speaking to FX Week sister title WatersTechnology in an interview, which discussed the opportunities for artificial intelligence technology and its potential limitations.

This article first appeared on sister website WatersTechnology.

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