I’ve worked in the financial markets for 25 years, within this time I have seen the sector change dramatically as a direct result of electronic trading, which was introduced back in the 90s. The pace at which the change has affected our industry has been slower than in other less regulated environments, but still market competitiveness is forcing innovation to thrive. The introduction of machines which reduce or substitute the need for human involvement in the trading process is a fact ever more present in certain asset classes than in others. Over time, exchanges have adopted market microstructures that incentivised electronic trading and as a result, more than 60% of trading volumes in equities are managed by machines today. Order sizes have reduced progressively over time, however, the order frequency has dramatically increased, adding to the continuous message volume growth that needs to be handled, processed and stored. Big Data technology, originally developed and successfully utilised in other industries, has transitioned into our arena where it has been largely adopted by financial markets to cope with the growing demand of data management within this information greedy industry. Machine learning and artificial intelligence (AI) is playing a more common role, where it not only implements trading systems but monitors and detects misbehaviours, more commonly known as market abuse. The financial industry is a highly regulated organism, in which the rules and guidelines must constantly keep pace with innovation by introducing measures to protect market participants and investors. Most of the time regulation corrects distortions of the system, with these new rules serving to re-establish trust after, for example, a major incident or even worse a financial crisis.
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