Two AI tools CROs can use to manage fixed income volatility

Chief risk officers are hunting for AI tools to help manage risk and liquidity in a highly volatile environment. While AI can help FIs manage risk, it also might be to blame for market volatility, Rob Cooke , chief executive at financial data company 3Forge , told FinAi News , adding that bond trading is now happening in real time. The shorter trading times can be attributed to a world that is more connected because AI is synthesizing information quickly and has the tools to execute them even faster, Cooke said. “They're feeding each other and it's only going to get quicker,” he said. [caption id="attachment_57385746" align="alignright" width="300"] (AI-generated)[/caption] Fixed income markets were known for low volatility and high liquidity, Pierre Buhler , managing director of financial services practice at consulting firm SSA , told FinAi News. And he said the quantitative tools used in those markets had not been updated in quite some time. But with volatility returning to the bond markets, many fintechs and other FIs will look to develop tools to better manage risk and seize opportunities, Buhler said, adding that AI can help keep up with fast-moving markets. At the same time, AI can help risk managers find “blind spots” in their strategies and holdings, Mike Reynolds , business technology executive at KeyBank , told FinAi News . AI also helps FIs run constant analysis “in real time or near real time” to make sure that the bank is hedged properly, Reynolds said. At some banks, these evaluations are done monthly or quarterly. The tools Trading platform service provider Tradeweb launched its fixed income market AI assistant TARA this summer. The tool can help traders better understand offerings, risk and opportunity by providing synthesized data, Izzy Conlin , head of strategy and solutions for global markets at Tradeweb, told FinAi News. “We launched with U.S. credit as the first product on the platform, but plan on adding all major [government instruments] on it,” Conlin said. “U.S. T-bills should be live on the platform for our traders in the next two months or so.” During the company’s second-quarter earnings call on Aug. 8, CEO William Hult said, “The challenge ... for a trader today isn't, by definition, access to data,” “It's pulling the signal out of a large and growing data set — fast enough to act on it.” TARA ultimately will move from data retrieval into insight generation, Hult said. Google Cloud , similarly, launched its Finance Research Agent last month. It has built-in bond workflows, Georgina Bulkeley , the tech giant’s global head of financial services, told FinAi News . In bond markets, the immediate value is faster, grounded risk analysis during macro shocks, she said. “Gemini Enterprise for Financial Services can help trading and portfolio teams analyze bond exposure in minutes, incorporate approved market and internal data and generate duration-hedging strategy suggestions to protect capital.” Bond-portfolio risk analysis can be reduced to less than five minutes, including automated duration hedging suggestions, while research and client-pitch preparation can move from days to minutes, Bulkeley said. Register here for the FinAi Lending Summit, set for Oct. 7-8 in Las Vegas. This inaugural event will include speakers from Fifth Third and Capital One , as well as a fireside chat with Piermont Bank founder and Chief Executive Wendy Cai-Lee .

Two AI tools CROs can use to manage fixed income volatility

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Two AI tools CROs can use to manage fixed income volatility

Tradeweb expanding AI platform’s capabilities by adding T-bills in coming months

Del-One FCU aims to double auto lending volume with Shastic AI agent

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