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Trade Talk Blog: FinTech Exchange 2017 Puts the Focus on Data


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fintech exchange 2017

Last week, hundreds of financial and technology professionals, including myself, gathered in Chicago for Barchart’s third annual FinTech Exchange. The event focuses on technology specifically for the markets and trading. The theme each year has evolved to reflect timely topics. As Barchart CEO Mark Haraburda shared in the John Lothian Newsletter, this year’s content was “focused on data, the way data is delivered, the way data is stored, the way data is analyzed and visualized as well as the new types of data in the alternative data space.”

While the attendees and presenters came from all over, Chicago’s presence was the strongest—not only because the conference is held there, but because Chicago has become an epicenter of fintech innovation.

If the crowd needed a reminder that Chicago has achieved powerhouse status on the global fintech scene, they got it right away. In his welcome address, Haraburda pointed out that Deloitte recently ranked Chicago #5 among the world’s fintech hubs. This was Chicago’s first time on the list, and it was a mighty debut, with the Windy City ranking ahead of everyone else but New York, Silicon Valley, London and Singapore.

If that fact wasn’t enough to convince attendees that TT’s hometown is “en fuego” in fintech, the lightning round presenters who hailed from Chicago offered plenty of proof. While they represented a wide mix of firms ranging from global exchanges to software startups, all are focused on delivering data-related innovation to our industry.

But not all of the speakers came from Chicago. The opening keynote by Vaidy Krishnan of Seattle-based Tableau focused on big data. According to Krishnan, while it’s important to build dashboards that bring data to the forefront, the real value of data comes when you delve beneath the surface and ask, “Why?” He asserted that this simple question, not the data itself, is what sparks new insights. But he cautioned that most analytics tools aren’t designed to let you explore the next layer of questions. His advice: choose an analytics platform with dashboard capabilities that will mine data where it sits and go beyond dashboard metrics to answer those unanticipated questions.

Julie Menacho from CME Group spoke about several of the exchange’s data-related initiatives—specifically application and data center services as well as partnerships focused on CME’s data business and market data distribution. Most notably, she described the exchange’s new cloud-based data offering. More than 450 terabytes of historical data spanning back to 1970 along with alternative data from non-traditional sourcesthink satellites, credit card transactions and social media—are now easily accessible via the cloud to inform investment decisions.

Sean Naismith from Enova schooled the crowd on another data-related topic: predictive analysis. Naismith said analytics has been the online lender’s “heart and soul” since Enova, which calls itself one of Chicago’s original fintech companies, was founded in 2004. He told of how customer demands for instant answers drove the company to build a real-time decision management system called Colossus. He explained that such a system requires three components—business rules, a predictive model and optimization routinesand shared six noteworthy lessons Enova learned in building Colossus. Among them: Deeply understand the customer experience and the data it leaves behind.

Jim Austin of Vertex Analytics gets the award for most entertaining presentation. Vertex’s platform helps trading firms manage the complexities and minefields of today’s regulatory environment by providing tools to scan and leverage both real-time and post-trade trading data. Austin took advantage of the fact that FinTech Exchange coincided with Bring Your Child to Work Day. He enlisted a team of school-aged kids to join him on stage, acting out the roles of both floor trader and electronic trader. He drew the biggest laughs of the day and a lot of Twitter love. Kudos, Jim.

Justin Dickerson of DataRobot added another layer to the data theme. He focused on automated machine learning (AML), which fits within the larger (and much talked-about) category of artificial intelligence (AI). DataRobot is making analytics modeling more accessible by leveraging the cloud. Dickerson revealed that more than 130,000,000 predictive models have been built on the five-year-old company’s cloud-based machine learning platform. His message was compelling: you better care about machine learning. Not just because it quickly identifies business issues/trends, has an inherent ability to “learn” at scale, and is changing almost every day—but because your competitors will be using it.

The final two presenters, Tim McDermott of Nadex and Michael Patak from TopstepTrader, come from very different companies. Nadex is a regulated exchange that offers binary options trading, while TopstepTrader’s mission is to fund new traders. Although the companies bear little resemblance at a glance, McDermott and Patak delivered a common message. Both asserted that the future of trading lies with retail. McDermott said the exchange is working to attract retail traders by addressing their concerns regarding cost and fear, adjusting market hours and other timeframes, and making it easier for new traders to get into the market. Patak said “all eyes are on retail,” and he’s focused is on expanding his firm’s user base through education. It will be interesting to see if their predictions play out.

Thanks to FinTech Exchange 2017, I’m now a little smarter and a lot more curious about the technologies and companies that are focused on data. The amount of data that our industry produces and consumes can be overwhelming, but there is an explosion of innovation happening in Chicago and beyond that can help process and manage this data in a much more efficient and profitable manner. I hope many of the 2017 presenters will return to FinTech Exchange next year with an update.

For more key takeaways from FinTech Exchange, check out @FinTechChicago and the #FTX17 stream on Twitter.