Recent advancements in technology have led to a monstrous spike in trades and trade messaging. Meanwhile, new regulations are requiring banks, brokers, dealers and futures commission merchants to not only store all of this new data, but also to conduct surveillance for trade infractions such as spoofing, layering or “banging the close.”
One particular challenge is that these new regulations require proof of intent, that is whether a trader or trade algorithm intentionally broke a rule. How does one sift through the billions of daily messages flowing through the pipes, flag anything suspicious, and prove intent at the same time?
According to CloudQuant’s Tayloe Draughon, the answer is artificial intelligence, machine learning and pattern recognition. In other words, fight tech with tech. His message to the next generation? We have problems, and our problems become your opportunities.