More Application Seen for AI and Blockchain

On the back of issuing our Disruptive Technologies report and recent CTRMRadio podcast on the same topic, a couple of interesting articles appeared today covering conferences in the FinTech sector. The first, an article by Platts, covering the International Swaps and Derivatives Association Technology Forum 2018 in New York, discusses various speakers talking about AI and Blockchain. The use cases discussed included using AI for price suggestion, spotting market manipulation, smart contracts and so on. Interestingly, speakers and panel members identified a couple of issues around smart contracts.

“One challenge is expressing the coded portion in a way that could be read and understood by a judge, Paul Lewis, partner at law firm Linklaters, said.

Another challenge associated with using smart contracts in commodity market trading could involve a situation where a trade in a smart contract is supposed to hedge something that is not in a smart contract, the panel’s moderator Scott Farrell, partner at law firm King & Wood Mallesons, said.”

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A second article picks up the theme of market manipulation quoting the CTFC Chairman speaking at the FinTech Week conference at Georgetown University’s Law School campus.

Commenting on the evolving global trading markets, Giancarlo noted that we should prepare ourselves for “a world where the majority of standard tasks are managed by machines.” He added that DLT-based systems may not only help in automating routine procedures, but also in reducing operational costs of trading platforms.

The Vanderbilt University School of Law graduate explained that blockchain-enabled transactions could allow for improved settlement, clearing, processing, and trade matching.

According to Giancarlo, higher-order computing technologies such as machine learning and advanced blockchain networks will be used extensively in the future, particularly in the global commodity and financial derivatives markets.

 

After listening to several presentations on AI and the future of IT at the Visotech User Forum in Vienna recently, we are more convinced than ever that AI and ML is finding many actionable use cases in and around commodity trading and risk management and, as our research suggested, Blockchain remains a little further away for more general commercial applications.

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