The Evolution of Trading Tech—iFX EXPO International 2022
This year’s iFX Expo in Cyprus covered numerous important topics from the tech world, including the shifts in the financial markets trading technology landscape. Devexperts’ SVP of Business Development Vitaly Kudinov took part in the “The Evolution of Trading Tech” panel, discussing behavioral data, gamification, and more.
Q: In general, multi-asset classes involve a lot of trade, market, and customer behavioral data. It has to be stored, analyzed, and processed. How do you cope with that, and what do you offer clients in that sense?
A: Trading and data analysis are two different tasks. So, I suggest brokers look for providers that do their thing best, whether developing trading platforms or analyzing data. For trading analysis, it’s enough to use some known technology for data cubes or mining. The trading platform, in turn, has data points that need collection. This includes starting from account registration and then customer behavior: how they trade, what order types they execute, how frequently they lose or win, and so on. So, if the trading platform supports such data collection, you can use any software to analyze it.
Q: Since brokers are the ones who often order simplification and gamification, how do you respond to their requests?
A: I would separate “simplification” and “gamification” as these are two great points to discuss. Simplification is like selling dime novels and scientific studies. So, you have a significantly bigger client base if you sell a simplified investment interface. However, many people will still request more trading analysis tools, sophisticated order types, and asset classes to trade. It doesn’t have to do with the trader’s age; it’s more about their passion for trading. It’s true that elderly people have started to taking up trading more often, so older traders who stay in the market will require more advanced tools. However, even with simpler investment apps, people can be successful. Even if they don’t use sophisticated order types, they can still make money if they wait – it is about timing. Trading platforms should support both types of traders.
Now, about gamification – it depends on how you understand the term. If it’s casino-style trading, it may be prohibited at some point. If it’s social features where you share your balance or trading history, you must be accurate. Some people might be motivated by this; some might decide to stay away from it. However, what definitely works – and we’ve proved it on our platform – is a personal dashboard. This works when people can see the results from their trades, some statistics, and their trading history with free notes and tags.
Q: So, it increases volumes and trading?
A: Yes, by going through your history, you can see what you did and how you did it. It’s not just the PnL of each trade; it’s why you entered the market at that point and why you exited it. So, this type of gamification – if we can call it gamification – really works. Another good example is when you offer the existing user more tools. When you introduce market analysis options or new asset classes, it also works to boost volumes and trading.
Q: Are there AIs in Devexperts?
A: Yes. We’ve lived in this world with AIs for more than 20 years, so our microchips are designed using AI. Even our software is designed using AI, and the refactoring of the software is already automated. So, if we say that AI is the automation of something the computer can do better than a human, we’ve already been in this world for quite some time. But if we say that AI can learn from its experience, it’s something we will see in the future. Maybe it won’t be Google experimenting with this, but rather another company, a smaller one.
We’d play with it and see the challenges. I am a fan of Nassim Taleb, and, using his words, if humans are completely dependent on machines, they will become more fragile. So, if they face significant hits of something unexpected, they will not be able to respond to that because everything is now dependent on an algorithm that had a small bug in the beginning, and no one could see it. I think the mixed model, using AI where it works and improves our work while letting humans decide, is better.
Q: Is the cost of development going down or not?
A: If you decide not to use existing software and want to build your own, you’d find software development is expensive. Don’t reinvent the wheel; use existing components and add new ones. Together – that’s the way to go.
If you’re interested to hear more from Vitaly Kudinov and other representatives of ours, Devexperts will be joining the Finance Magnates London Summit (FMLS) this November and will be participating in “The Cutting Edge: Advances in Trading Technology” panel discussion.