FinTech Exchange 2016 Chicago was no wistful exercise in futurology last month. It was firmly set in the do-or-die present of technological solutions and opportunities.
Chicago may not be thought of as a fintech hub among key global financial centers such as New York or London, but the homegrown talent was out in force along with a slew of imported presenters on the forefront of finding and pioneering new technology opportunities.
The themes were well known — big data analytics, blockchain, machine learning and the necessity of reimagining the assumptions around how a business runs. And of course, the event’s overarching message of “Run, don’t walk, to the cloud” was loud and clear.
FinTech Exchange 2016 – Choon Aun Quek, Google
Google’s head of cloud platform, Choon Aun Quek, set the table for envisioning the next wave of computing. Google, while rapidly expanding its cloud efforts, still trails Microsoft and Amazon in market share, but it is growing by offering powerful tools, sometimes initially developed for use within Google, and then giving the venture legs by keeping everything open source. (GitHub, a multifaceted open source software development hub, received kudos from multiple presenters.) Google’s deep learning and predictive software — the code that can figure out your search terms as you type, for example — can be applied to any opportunistic whim now. The protocols Google uses to comb through the petabytes of data they get daily? Those underlying guts are similarly available.
A key point from Google that carried over was the need to keep technology infrastructure agnostic. For most of the technologies represented by presenters at the event, agnostic is a key term since data needs to run smoothly between disparate systems. Tammer Kamel, the founder and CEO of Quandl, would not be successful in creating a one-stop shop for various data sets if they could not be used across many programming languages. And for Kamel, we’re only at the beginning. There are so many different applications for data we still haven’t realized how to harness.
FinTech Exchange 2016 – Tammer Kamel, Quandl
“It is almost religious now, that if you’re in business you need to be collecting data about everything you’re doing, especially your customers and how they interact with your product,” Kamel said. “Well, what’s actually going on because of this, is that [nearly] all the companies in the world have their finger on the pulse of some little corner of the economy. Which means in aggregate, you take the sum of all this data from all these data-centric organizations and what you’re essentially doing is monitoring the entire economy in real time.”
Getting all of this data and making it available is Quandl’s goal. And Kamel stressed the need to think broadly of data that might not normally be used in the realm of financial analysis, forecasting and trading; data he deems “alternative.” And courtesy of the Internet of Things, there is data all over the place. For example, what if the information gathered by a combine harvester as it drives through a field could be sifted through for indicators about the health of this year’s corn crop? Or what if a travel booking site’s traffic could be used to figure out the demand for seat miles across a variety of factors? Those sorts of existing data sets can be leveraged further. Alternative data now accounts for 30 percent of Quandl’s revenues and is its fastest growing data type.
FinTech Exchange 2016 – Mark Haraburda, Barchart
Barchart’s latest endeavor would yield a rewarding set of alternative data for the likes of Kamel. Grains.com is Barchart’s attempt to get people buying and selling physical grain online, rather than by phone or in person. Using an integrated Google map, users can look at the bid-offer for thousands of grain elevators across the United States. These sorts of browser-based applications are the new normal for Eero Pikat, president at Barchart. Pikat, while going through the nuts and bolts of building Grains.com, made sure to mention that “Java is dead” multiple times, a provocative thought given the ubiquity of the programing language.
FinTech Exchange 2016 – Adam Honoré, MarketsTech
While these projects are legitimate fintech exploits, there is a ton of noise in the fintech arena, said Adam Honoré, CEO of MarketsTech. He burst the bubble of unbridled enthusiasm around fintech, or at least tried to reign it in. For him, an unchecked love of blockchain is misplaced and priorities for it are out of whack. Honoré suggests that firms first migrate to the cloud before going gaga over blockchain. While he believes there is plenty of potential for disruption due to blockchain, it will not come, as many expect, in clearing and settlement. Quite simply, no company wants to rewrite 10 million lines of code to accommodate blockchain during a back office conversion, he said. Instead, the real future of blockchain will thrive in areas such as identity access management and other problems that haven’t been adequately addressed yet. He was also quick to point out that a lot of these much-hyped areas are getting crowded, and at some point there will be more losing firms than winners.
While the event was rooted in the here and now, Google’s Quek did offer one insight into the future for technology: a no-ops world, where technological infrastructure is so automated, self-regulating and abstracted there is no need for a dedicated team to run and manage software internally. Such smart technology is gaining ground in areas of the fintech space. Chicago’s Neurensic already applies machine learning to compliance and is working on brokerage operations, while another Windy City native, Narrative Science, mines data and spits out insights in plain English.
So, a no-ops world might not be that crazy at all.