Imagine your personal life without your favourite messaging App(s). As a society, we have gone from, “You don’t write anymore,” to “We don’t talk anymore,” to “Ping me!” To the point where a whole new language (not programming) has developed, from acronyms to slang. For FOMO everybody needs to understand the given connotations ASAP!
Within financial markets, the use of messaging platforms has been alive and well for many years. For example, Instant Bloomberg (IB) Chat has been widely used in the financial industry for communication, collaboration, and information sharing among sell-side and buy-side professionals. The ability of IB Chat to facilitate price formation and negotiation, whether via RFQs or IoIs, subsequent affirmation and confirmation and post-trade settlement enquiries, is something that trading venues have noted, and some have mimicked.
Furthermore, trading venues can significantly benefit from the use of chat platforms to enhance communication, facilitate execution, manage risk, and streamline post-trade processing. In addition, we have previously highlighted how chatbots and large language models (LLMs) have the potential to revolutionize chat platforms for trading venues. They can help to improve the user experience, make the platforms more efficient, and provide traders and brokers with the insights they need to make better investment decisions.
Suffice it to say that market participants are adopting new models to exploit the changing technology while maintaining the advantages of traditional workflow in markets. This is particularly true when liquidity is fragmented or market participants are generating strategies and pricing in real time, pulling live data from various sources and presenting complex strategies to their clients as single executable products, or executing large volumes as block trades. Of course, ipushpull Solutions are well positioned to collaborate with exchanges/trading venues to deliver an omnichannel approach, incorporating chatbots, rather than members/clients accessing data from multiple sources manually.
The CME has been further developing CME Direct in conjunction with Google so that users can access Google Cloud Platform services, such as AI and machine learning tools, to improve their trading strategies. This could also allow CME to interact with a broader audience, including retail investors and corporates, and develop further their real-time chat, group chat, and file sharing.
The LSE and Microsoft also announced a collaboration platform that will combine LSE's Eikon Messenger with Microsoft Teams. Some of the features mooted are, real-time chat with an open directory, file sharing without attaching files to emails, integrated news and data, and using AI to provide market participants with insights into market data and trends.
Last, but certainly not least, ICE recently confirmed that the number of ICE Chat users has grown at a 15% compound annual growth rate over the last five years to nearly 120,000 users at the end of the second quarter of 2023. Moreover, proprietary LLMs in ICE Chat have helped boost the number of users and drive a nearly 60% rise in energy volume executed via the platform in the first half of 2023. The platform helps to automate workflows by identifying trade opportunities in real time, including features that enable quote and trade recognition logic, blast messages and a directory of market participants.
Of course, for those venues or market participants that are late to the party, it could be argued that they should collaborate with third-party chat platform providers, such as Slack, Symphony, WeChat etc; allowing them to bring a chat platform to market more quickly without the time and expense of building from scratch. To mitigate this significant pain point and development risk ipushpull has developed an omnichannel chatbot service (Client Chatbots - ipushpull chatbots in Symphony, Teams and Slack) that further enhances chat platform usage. By making a one-time configurable, no-code connection from a data source such as Excel or a database, or by connecting via API, consistent client workflows can be delivered across multiple chat apps with unified monitoring and permissioning and without any further specific integration work required. This removes a great deal of risk for the venue in terms of the build cost, choice and order of chat platforms with which to integrate and the time to market.
Furthermore, vendors like ipushpull can collaborate with cloud providers, such as Amazon Web Services, who recently announced Amazon Bedrock, democratizing Foundational Model access for developers to easily build and scale generative AI-based applications, using familiar AWS tools and capabilities. This further allows venues to overcome the challenge of incorporating their business knowledge into LLMs to deliver accurate and relevant responses.
In short, for venues and liquidity management providers that are not on board, that ship has not sailed, the train has not left the platform and there is time to play catch up quickly. As a reminder, are you missing out on the ability to provide your members/clients with an ecosystem to share:
Real-Time Communication: Allows users to communicate with colleagues, clients, and counterparties instantly.
Market Insights and Analytics: Share notifications and information around news articles, research reports, and analysis.
Trade Execution: Discuss, negotiate, and confirm trades directly with counterparties.
Trade Settlement and Post-Trade Processing: Automate post-trade activities by interacting with chatbots to reconcile discrepancies, and initiate settlement procedures, ensuring greater efficiency by reducing manual intervention and minimizing errors.
Risk Management and Compliance: Contribute to effective risk management and regulatory compliance by allowing traders to discuss risk exposure/mitigation strategies. Interactions can be archived/monitored, providing an audit trail, and alerts/notifications proactively circulated.
Enhanced Customer Experience: Provide immediate responses to queries, assist with account management, and address technical issues, to provide a more personalized experience.
Innovation and Customisation: Chatbot APIs allow third-party developers to create tailored solutions, ranging from advanced trading algorithms to interactive trading assistants.
Accessibility and Inclusivity: Chat platforms are accessible through mobile devices and desktops, enabling traders to engage in markets from anywhere, promoting greater flexibility and inclusivity.
Networking and Industry Insights: Allowing users to build a network of like-minded professionals. The venue can facilitate forums to exchange information with peers.
The potential of chat platforms and chatbots in trading venues and OTC trading platforms can revolutionize how traders communicate, execute trades, manage risk, and access market insights. By embracing the capabilities of such technologies (not forgetting the further benefits of incorporating LLMs and generative AI), trading platforms can enhance customer experiences, streamline operations, and create a more dynamic and efficient marketplace for financial instruments.
Welcome to the future of trading on venue and in OTC markets. Head to ipushpull Solutions to discover more.