Citadel Securities, Two Sigma And Others On The Future Of Finance

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The state of the financial service industry is swiftly evolving as technology extends its reach into every sector. In examining the trends reshaping the industry, industry chiefs will share their techniques for keeping apace with technology in a data-driven environment. How are they using big data and artificial intelligence to increase their returns? How can banks, institutions, and investors adapt and use the new tech? What pitfalls should companies avoid during technology rollouts? And how should regulators approach these constantly-evolving tools?

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John Foley, U.S. Editor, Reuters Breakingviews


Michael DeAddio, President and Chief Operating Officer, WorldQuant, LLC

Kelsey Gunderson, Global Head of Trading Products, BMO Financial Group

Paul Hamill, Global Head of Fixed Income, Currencies and Commodities, Citadel Securities

Ali-Milan Nekmouche, Chief Data Strategist, Two Sigma Investments

Lara Warner, Chief Compliance and Regulatory Affairs Officer, Credit Suisse

The Future Of Finance


Hi everyone welcome to The Future of Finance panel Malcolm. So it's a very broad topic the Future Finance thoughts or just a thought experiment how did this panelist also go back to the 2008 Milken Conference program see what people thought the future of finance was then. I found lots of talk of NTFS and of managing volatility under the disruption that was going to be caused by Blancas. Look obviously a little less than 10 years ago it wasn't even clear that there was going to be a future of finance as we understood it. But things have changed a lot and to help us peel back the legs of what is the future of finance we have five brilliant leaders and innovators here on the stage. And I will briefly introduce them. Going from your left to right we have Mike DRDO who's the president and CEO of World Can't we have Dan Bulkley who's the head of global investment in corporate banking. And Laura warna is the chief compliance and regulatory affairs office of Credit Suisse. Paul Hammell is the global head and fixed income currencies and commodities at Cisco Citadel Securities. And Ali Mellon is the chief data stressed just to sick. So to help us navigate the future of finance I thought I would ask you to kick us off and just sort of helps define some terms. So when you when you think about the future of finance and particularly when you think about it now as opposed to a year ago what do you see.

Well as we were discussing just in the ready room before this and we were talking about what it was 10 years ago and five years ago the conference I think we all realized that we don't have crystal balls and we really have no idea what the future is. So it is very difficult to predict that far out. So what I think we'll be talking about here and I want to lay the groundwork for a little bit especially how we at worldwide look at the world is the basic tenants of finance being really completely data driven environment and world. When's the last time you saw 18 wheeler pull up Extra Credit Suisse and walked out with any products right. We are a pure data driven business. Is that you start with the data. It's critical it's always going to be there. But what you find out is now it's exploding. Everybody world data sources not only are you a data source what's inside your phone's a data source. For those of you who've been swab by the Byrock Cornell Wildhorn and friends outside what's on your phone as a data source now. And so in the financial world you have to start taking this into account. You have to have a strategy on how you do it and if you're not doing it differently than you were last year or the year before. That's a big challenge. And I think we'll talk about that and then the second thing is talent and then this is pretty global but data does a lot more of it but it's noisy it's people that turn data into value into signals into things you can do things with. And notice I didn't say AI or machine learning yet. Those are tools.

It's still the people and how you access the people and where they come from and how you find them. If you're not innovating there I think we'll talk about this later as well then that's going to be a big challenge and we were talking about earlier. It's not just your STEM majors it's not just your economists. We have microbiologists who are starting to work in our financial worlds. So think about that as well. And then the last thing that we look at is you find the people you get the data you have to unleash. You have to unleash your smart people commanding control top down hierarchical organizations don't work anymore and I think all the innovative organizations are out there are really looking at how they manage their people and how they unleash them to achieve all these things. So from there I will I will have Sudan how does this look to you coming from a corporate investment banking perspective was Future Finance. Sure. I mean I think in lots of ways we talk a lot about disruption. We talk about things change and the perspective I would share is that we are and I think most people on the panel get to the same place we are embracing these changes and by embracing the change it's actually a partnership model. It's a service model it's a contribution model and it isn't something where we're going to wake up 10 years from now and all of the big banks are gone and all the big quant funds run the world. What we're going to find out is that there's actually been more disintermediation we're going to have more interesting ways to make money.

But what you'll find is that most entities that are looking forward and want to adapt will adapt and they will find a way to reinvent themselves which is what most financial institutions have been doing for 20 30 50 100 200 years. When did you realize that you needed to reinvent yourselves in this kind of new data world of data. Usually you like all good things for a bank. We got it from our clients. All right. And you wrote talking to clients actually doing business with them and you know a good example to work on here is innovating themselves and you watch that innovation.

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