Your 2016 Trifecta: Machine Learning, Blockchain & Social

In the words of Pete Townshend, meet the new boss; same as the old boss. That's right, folks, I'm back as your weekly columnist for Buy-Side Technology.

As you may have read before the Christmas break, Tim Bourgaize Murray has left the company. He's a good friend of mine, and I wish him nothing but the best. I'm sure you'll still be seeing him around at industry events, so you'll hopefully be able to get your dose of TBM in the New Year.

He took over this space about a year-and-a-half ago, and he flourished. But now y'all will have to deal with me. So, for the near-term, in addition to my duties as US editor, I'll be commandeering this column, a position I've held previously, in addition to the mirrored role over on Sell-Side Technology, which is currently occupied by the nonpareil Dan DeFrancesco.

As I re-acclimate myself to giving my opinion in a public forum, let's take a look at what I expect to be three major talking points in 2016 in the pages of Waters and at our various conferences. These are hardly new topics, but the way that they're used and manipulated could change the way that the capital markets work.

Rise of the Machines

As the ability to handle huge datasets continues to rapidly expand, so too will machine learning techniques.

Advancements in machine learning and, more generally, artificial intelligence have been pronounced. Some might say scary. Even still, this is not anything new. Scott Patterson wrote a whole book about it back in 2012. But as the ability to handle huge datasets continues to rapidly expand, so too will machine learning techniques.

At last year's Waters USA conference, which was held on December 7, I was quite surprised by how many of the panelists wanted to talk about machine learning. The use cases were varied: trading, AML/KYC, cybersecurity, risk management, mobility.

I'm currently working on a feature looking at how advancements in the field of machine learning is helping to make market-timing strategies more viable. I also expect to write a whole lot more about how the machines are becoming sentient ─ I mean, more intelligent ─ over the coming year. If you have some ideas, send them my way. My contact info is at the bottom of the page. So keep on reading. Or skip ahead. Whatever.

#SocialMedia #Yay #IHateHashtags

Judging from my Twitter feed ─ which includes a fair amount of Brits ─ my colleagues across the Atlantic were obsessed with a puddle in Drummond, Newcastle on Wednesday. Over half-a-million people watched a feed of said puddle on live-streaming site Periscope, and it produced a barrage of tweets on Twitter. Hell, the Guardian and Telegraph actually covered the mighty puddle.

We live in a weird world as it is, but I'll truly never fully understand my British colleagues and friends. Their sense of humor and amusement is beyond me. Also, apparently they call inflatable mattresses lilos. I...I just don't know.

But the coverage coming from Drummond goes to show you just how connected this world is. Expats living in New York could watch, in real-time, people traverse a miniature body of water from an ocean away. Social media makes this possible.

The world is awash in a sea of data. [Are y'all digging these water puns yet?] There's value in that information. Through fits and starts, trading houses have tried to find value through social media. To the previous point about machine learning, as our ability to handle, store and then analyze data improves, the ability to squeeze some [bleeping] money out of these sites will become more realistic. [Name that movie! Warning...strong language if you click that link. And a severed hand. But it's a great scene, nonetheless.]

Ugh. More Blockchain.

I'm only half-feigning disgust about the topic of blockchain, which was written about extensively in not only this magazine, but every publication that covers finance.

It's actually a fascinating piece of technology and it could potentially revolutionize finance. The key word being could. As Dan DeFrancesco pointed out in his Sell-Side Technology column, "Where are the results? In 2016, I'd like to see big banks, asset managers and hedge funds start implementing this technology in a real way instead of just talking about it."

All indications are that 2016 will be the year that blockchain technology as a distributed ledger will start to stabilize in what it can be used for. Last year was about throwing everything at a wall to see what sticks. This year should show some more tangible benefits.

Now, when Tim was here, I deputized him as our honorary bitcoin/blockchain expert. I'm not sure exactly how we'll slice up coverage of the topic this year, but I do plan to write extensively on the subject.

OK, that's all for today, my lovelies. Check in next Friday for more of my brand of snark. If you want to chat, shoot me an email (anthony.malakian@incisivemedia.com) or give me a call (646-490-3973).