Deutsche Börse Acquires Quantitatative Brokers

Deutsche Börse Acquires Quantitatative Brokers

Deutsche Börse buys majority shares in Quantitative Brokers – an independent provider of advanced execution algorithms and data-driven analytics for global futures, options, and interest rate for expansion in the buy-side markets. 

  • The transaction repositions Deutsche Börse closer to the source of trading interest in the buy-side value chain.
  • Creates synergies in quant competency with Quantitative Brokers 

Thomas Book, Head of the Trading & Clearing Division of Deutsche Börse and Member of the Executive Board: “We are investing in a growth business with a renowned, innovative and leading quant team delivering a unique set of competencies in algorithmic execution. The exciting QB platform and team are a perfect fit with both our existing business and our long-term strategic perspective.”

Christian Hauff, CEO and co-founder of Quantitative Brokers: “The QB team is thrilled to join Deutsche Börse’s portfolio of strategic companies to accelerate further our institutional client uptake and global expansion across markets and asset classes. Our partnership with a 30 billion-dollar, global, multi-asset exchange group will provide even greater momentum to our growth plans.”

Robert Almgren, Chief Scientist and co-founder of Quantitative Brokers: “Deutsche Börse’s global relationships with buy and sell-side customers will help us add value to an even broader range of clients. Our intelligent solutions will provide them with additional tools to better manage order execution in an increasingly complex market environment.”

Source: DeutscheBörse

Restarting The Global Economy

Restarting The Global Economy

Let us first define the challenge, which is to open different parts of the global economy in a synchronous manner that is multi-connected to various geolocations simultaneously with heterogenous health risk profiles.

The global geolocation opening solution for every given location or region is to create an algorithmic output, that sequences the timing of opening for every geolocation based on the acceptable minimum health risk tolerance profile for all its connected geolocations, both domestic and global.

The global geolocation opening solution is achieved using a comprehensive standardised database for all the geo-connected health risk profile. The economic opening algorithm then gives the optimum opening date for every geo-connected location or region, ensuring continuously that the minimum health risk exposure is respected based on its real-time health risk data capture.

Deutsche Börse Acquires Quantitatative Brokers

The Digital Market Economy – An Executive Brief

Let me start by defining a digital economy as a collection of known and newly-added markets, each made of traceable, verifiable, auditable, transparent, coherent and economic value-oriented transactions between legal sellers and buyers of services and products that can be digitally reversible, if permissible by a digital intelligent contract, based on a set of digital regulatory lifecycles captured in a given market ecosystem.

The design of any digital platform requires the ability to create a new autonomous market, using a designated internal API in onboarding new markets, in an orderly and fair manner. A New digital market should utilise innovation hubs, to allow incorporation of viable tested digital markets, shared services, products, participants, market structure, updatable system innovation and transactions. Every market should support a versioned system component until it is superseded by a new version. Each digital market can have a static or dynamic market scope — national, regional, system-defined or international reach.

Any digital onboarding process requires a digital business case that is reviewed against market factors that can be defined by the digital market listing risk framework.

A digital market structure is configured with an associated single or multiple market infrastructure based on market scope. The market infrastructure interface allows interoperability of markets and transactions. The market availability is real-time with 24/7 – global, region, country-group or country-specific services. For maximum flexibility, platforms can allow configurable business opening and closing daily operational times. A digital market should allow the inclusion and exclusion of markets by regulatory jurisdictions.

Each component of a digital economy, market or transaction requires the business concept of activation, deactivation and migration. Some digital markets will have limits and trigger thresholds and the ability to set transaction chains for transaction completion.

Every market needs an internal notification mechanism to alert its digital monitoring authority regarding any internal market dislocation, signalling a market resolution or intervention process. In this architecture, market disruptions are kept to a minimum enabling high availability. A dynamic rerouting digital service can be inherently enabled to allow internal market repair and resilient in situations of supply or demand disruptions in a given market structure.

Every digital market mandates a form of risk identification and management framework with reporting capabilities to both internal and external stakeholders. Stakeholders require a mechanism for resolving of services and product delivery disruptions.

A digital market might require a central regulator, which can be a dynamic smart super participant in a given market or markets to administer the role of market or service governance. The architecture of a digital market should be flexible to accommodate data privacy, data protection, multi-currency product pricing, cross-broader transactions, digital payment services, digital central bank currency options, digital central bank settlement options, secured digital vault, digital ledger mechanism as a single source of truth, unsupervised autonomous AI embedded with accountability and explainability using acceptable human assistance.

A digital market utilises a market surveillance system and a digital business architect required in creating new digital markets, services, products and transactions, enabling public or private market access to eligible market participants.

A digital market might incorporate the concept of market equivalence based on regulatory eligibility, market development governance principles. A digital market can adopt multiple linguistic digital-platform in a multi-cultural country or international market settings.

A new digital economy is like learning a dynamic language, where both the public and private sector are continually collaborating for the advancement of each participant in the service and product delivery chain, using the optimum supply delivery mechanism for all internal and external stakeholders.

A new digital market or platform operates on the foundation of the unity of all stakeholders to create a new inclusive, fair industry-agnostic market.

Every digital market or platform — domestic, regional and international will cater equally for both wholesale and retail participants in the delivery of services, products and value.

Each new digital market needs to be transparent in onboarding all sellers and buyers for available services and products using a multi-currency pricing order model capture in compliance regarding the associated regulations, if permissible.

Every participant should have both market and transactions specific profile, which assist in managing digital market risk. Participants should be able to define acceptable market criteria.

A digital market needs a pricing strategy that uses either a combination of positive prices, negative prices, discount prices with transaction settlement in cash, securities, digital securities, digital-money, asset-based digital money like a stable coin.

A vital aspect of any digital market is the robustness of its pricing mechanism being flexible to accommodate both price-driven and algorithm-driven by AI. The AI algorithm should be flexible and configurable to be triggered by market tradable indicators or trends.
A digital market should have the capacity to notify all market participants of new unforeseen market trends.

Each digital market will support transactional scalability in domestic, regional and international markets. A digital market needs the inherent capacity to adjust in an orderly manner to any disruptions to supply or demand of services and products.

The scale, nature and complexity of a digital market mandate a digital change-manager that mimics enterprise-wide changes weighted by stakeholders consent. A digital market needs the features of digital meeting, digital communication and digital collaboration from any system defined geolocation.

Every digital economy needs to shield its architecture from the following changes — technology, business model, regulatory, product and service with the addition of cyber-secure by design and default.

A digital market should have its communications API, internal process status reporting, critical business process dashboard, market thresholds, market trends analysis, settled transaction status etc.

Creating new digital markets will be the hallmark of the innovation cycle by delivering services and goods globally.

Big data – Online shopping technology

Big data – Online shopping technology


Yes, computer technology we cannot seem to do without it. Recent years have seen a massive increase in online activities including but not limited to, banking, insurance, bill management and payments, shopping, trading, news, music, electronic books, social media, online gaming, online film sites and many more. 

The recent surge in people staying at home showed pressure in some unexpected and some familiar places. Some governments were asking Netflix and companies alike to reduce the bandwidth usage to reduce the stress on the broadband services. I will save the broadband discussion for another day.

Ocado – A case study

Let us look at Ocado if you read the about page, and it states they are the world’s largest dedicated online supermarket and it has a quarter of a million(250,000) active customers (of which I am one) and 15% share of the UK online market.

So what happened then? Why are we getting the above page? Well, for one, when companies say they are online, it does not mean they are in the cloud. They could have their server room somewhere in their head office, and this clearly cannot scale as quickly as possible. Or they may be in the cloud but have implemented a monolithic application.

I am sure that we do not have 108,668 people queuing where I live. This number as you can see is half way. We started off with over 250,000.

So they introduce the online queuing system. The queuing system could also do with an update if you insist on using one. Take a ticket and leave your mobile phone number when there are three people ahead of you get a text to let you know you are almost next in line ( yes it can be a paid service). Let us not dwell on this; there are more pressing IT strategy issues as well as architectural issues.

IT & Data Strategy

Why are IT and data strategy essential in the cloud age? A company that wishes to grow and scale quickly must have a mandate which comes from the board of the company. Failing this all efforts from IT will be futile. For an online business, a cloud strategy is a must if you want to grow your business.

What is in the cloud?

Cloud service providers offer a wide range of services that allow your digital business assets to be secure and scale seamlessly. 

A lot of companies are afraid of putting their data in the cloud due mainly to security fears. I will touch briefly on some available services.

Security 

  • Cloud providers offer protection for protecting data, protecting application and protecting your infrastructure. 

 CDN 

  • Webpages can be cached at a location closest to you, allowing for low latency.

IAM 

  • Identity management allows you to create users, groups, roles and policies.

Durability 

  • Guarantees no loss of data so data will be there when you need it.

Availability 

  • Speed of access. Customers get fast and reliable access

Scalability 

  • Allows an application to meet demand seamlessly when required. In other words, to the end-user nothing changes.  
  • Resources automatically get added as volume increases. 
  • As the volume decreases, the resources are released.

Networking and elasticity in the cloud

In the example case, Ocado, auto-scaling and load balancing seems to be an issue.

Conclusion

How will I implement the Ocado online platform differently?

  1. Move it to the cloud if it is not already there. e.g. Amazon Web Service (AWS ), Google Cloud Platform (GCP) and Microsoft Azure.
  2. Use implement a scaling strategy this will allow your site to autoscale
  3. Partition the online service by location. Each user should be able to request a service base on their location. The calendar is not a global calendar so I am not sure what went wrong here.

It is pointless for a customer to wait on a queue for 6hrs and lose their place because it is their turn on the queue at 4 am and well it is sleep time. 

One thing is for sure it seems the whole country is in one queue.

Technology – Weather meets scheduling

Technology – Weather meets scheduling

To all those out there who view technological advancements as a hype. Let me introduce you to storm ciara. Ciara is the storm that battered the UK today. See article

The effect was cancellations and more cancellations of trains, outdoor events, flights, etc.

Flight cancellations today at Heathrow T5.

I was set to take a flight at 14:30 (UK) today. Yesterday, yes yesterday, at 11 am or thereabout, I got a notification from BA saying my flight had been canceled. I had options to rebook which I did.

Flight cancellations today at Heathrow T5.

Now yesterday was sunny and dry and lovely. How wonderful that they were able to predict the exact time range the storm will hit the island and based on this reschedule/cancel affected flights.

A brief look into weather forecasting. Several models are used for weather forecasting with the aid of a supercomputer. Read a brief history here

Without meaningful insight into their operations, I can only assume that there was no army of schedulers rescheduling the flights and sending out emails. Perhaps someone to glance over but not entirely manual.

The display board immediately displays the cancellation message for the respective flights. Have you ever wondered what technology sits behind these? There are many out there. One of the technology in the ecosystem could be any message streaming application like Apache Kafka. What process exists to generate emails to all booked passengers in canceled flights? RPython, SQL batch job, Java? What email server is used to send out bulk emails to notify passengers? Outlook?

Technology is everywhere these days you might be forgiven for taking it all for granted.

So when next you are going about your daily routine see how technology is improving your quality of life.

Further reading:

Restarting The Global Economy

Digital Economy

One of the key strategy of a digital ecosystem is transforming all data assets into continuous profit  for its stakeholders, using innovative business models driven by a combination of DLT, AI, cloud  and edge computing. 


Strategic benefits can be initially realised from embedding automatic business and database processes in all enterprise solution, without manual interventions .The digital solution ecosystem, needs to support self-updaying process by design and default. 


A practical application in a digital exchange model will be a smart exchange ecosystem that allows automated business case and model introduction using an updatable digital market structure supported with multi-jurisdiction digital regulatory inputs in facilitating a globally scalable digital exchange.


A vertically integrated digital exchange will then operate as a dynamic chains of financial digital services, fulfilling the entire lifecycle of services such as asset listing, trading,banking, insurance, asset management, clearing , settlement , payment and custody services.