The world currency market began to actively replace professional traders with robotic trading systems. In North America, the heads of the largest trading and foreign exchange companies have already announced the transition to digital during 2018-2020. Exchange traders are also supported by the tops of influential international banks. Analysts believe that getting rid of the human factor in securities and currency trading minimizes the risks of fraud. However, regulators around the world fear a repeat of the global crashes of 2010 and 2014. About what the replacement of traders with robots can lead to. The world currency market, where the daily trading volume is estimated at $5.
1 trillion, is becoming less and less dependent on the person. Thus, 94 heads of the largest trading and foreign exchange companies in the US and Canada announced their intention to switch to automation of most of their foreign exchange transactions during 2018-2020. Such data is contained in the TradeTech FX survey. From 2012 to 2016, bank front-office employees reduced the share of transactions in G-10 currencies (currencies of ten countries from which the IMF can borrow to lend to other countries, such as Canada, US or UK). More than 500,000 stock exchange jobs have disappeared on Wall Street since the financial crisis, according to Bloomberg. This coincided with the automation of the process, which led to a reduction in staff and gave rise to a new generation of traders whose decisions are based on mathematical models. The development of automated trading today has already become an irreversible process in the global foreign exchange market.
This was confirmed in a conversation with RT by the general director of the analytical department of Alpari Research & Analysis in the UK, Roberto d'Ambrosio. “Technology and programming languages have reached a level that allows you to create very complex systems with the ability to adapt and learn. New approaches to trading have been made possible by the incredible computing power that we can currently use. They allow you to create algorithms that combine the analysis and interpretation of market data with a huge amount of information from other sources, thereby opening up new forecasting models that were not available before,” d'Ambrosio said. empty halls Automation provides a more objective and emotion-free approach to trading, experts emphasize. “The use of new technologies allows us to rationalize the processes associated with the trading activities of large asset management companies. They are actually reducing the number of trading floors, focusing on technology,” explained Roberto d'Ambrosio.
So, in 2000, 600 traders worked at the headquarters of the investment giant Goldman Sachs, but by 2017 their number was reduced to two people. All the rest of the work is now done by automated trading programs, which are maintained by 200 computer engineers. Reuters At the end of October 2017, after 31 years of operation, the Hong Kong Stock Exchange, the second largest stock exchange in the world, closed its floor. At the same time, the trading platform has completely switched to electronic transactions. According to the latest report published in 2014, transactions on the trading floor accounted for only 0.2% of the total exchange turnover. The attendance of the exchange also dropped noticeably: in 2000, there were 600 traders on the trading floor, but in recent years there have been about 30 of them.
The Hong Kong exchange was not the first in the list to completely abandon the trading floor in favor of electronic transactions. Earlier, the stock exchanges of Tokyo, Singapore and Frankfurt am Main came to this decision. Banks choose robots In 2017, several of the largest banks at once announced plans to replace employees with robots. At the end of October, Sweden's Nordea Bank AB announced it would cut 6,000 jobs by 2021, including about 2,000 external consultants. In addition to minimizing risks, automation is also based on the desire to save on human resources, since every trader is a highly paid specialist. Oleg Kislyak, President of Bank Voronezh JSC, spoke about this in an interview with RT. According to him, this technology also allows to radically reduce decision-making time, due to which the frequency of operations is constantly growing.
Vikram Panditt, CEO of Citigroup Inc. during the global financial crisis, predicts that the development of technology could lead to the disappearance of about 30% of banking jobs in the next five years. In an interview with Bloomberg Television, the banker emphasized that artificial intelligence and robotics are reducing the need for back office staff. Deutsche Bank CEO John Craen also warned about the replacement of workers with robots. “In our banks we have people who behave like robots doing mechanical things, tomorrow we will have robots that behave like people,” he said. he is the Financial Times. One of the largest Australian banks National Australia Bank Ltd.
in November announced plans to cut four thousand employees by 2020, which is approximately 12% of the total number of employees. According to Chief Executive Officer Andrew Thorburn, the bank simplifies and automates processes, many tasks are moving into the realm of digital solutions. Automation has gained massive support in the industry following a string of high-profile currency-counterfeiting bank scandals that resulted in more than $10 billion in fines. According to Bloomberg, Barclays, The Royal Bank of Scotland, Deutsche Bank, UBS have been accused of manipulating the foreign exchange market in recent years. , JP Morgan Chase, BNP Paribas. Reuters In October 2017, a Brooklyn court convicted Mark Johnson, a former foreign exchange chief at HSBC Bank, of $3.5 billion in foreign exchange fraud.
He now faces up to 20 years in prison. Johnson became the first person to be convicted of front running (the practice of a broker leaving their buy or sell order before a large client order, knowing that it will raise the price). System failure November 1, 2017 The Financial Stability Board (FSB, an international organization of mega-regulators of the largest countries. - RT ) published a report in which it expressed concern about the use of artificial intelligence and machine learning by financial institutions. “The vulnerability of world banks to systemic shocks could increase if they become increasingly dependent on the same algorithms and data flows,” the FSB report says. It also calls for increased attention to compliance with data privacy, risk management and cybersecurity protocols. The report also mentions the fact that many technologies are developed and tested during periods of low volatility in financial markets and, as a result, “may not offer optimal response in times of significant economic downturn or financial crisis.
” Roberto d'Ambrosio also warns of the danger of system failures. In his opinion, one of the key problems of automation is a possible sudden surge in market volatility. .