The thing with over-the-counter (OTC) trading is you have to call someone.
Now, thanks to a chatbot from London-based trading startup Artificial Intelligence Exchange (AiX), OTC traders can hide their trades from any human broker.
The artificial intelligence tool for big-money traders is coming to the crypto markets in December. After that, AiX intends to roll it out to traditional asset classes in Q1 2020.
AiX claims its AI chatbot can replace human brokers in trading. It automates pre- and post-trade administration, assists in negotiations, performs pre-trade credit checks and passes trade details electronically to a settlement agency or clearinghouse.
“It can handle negotiations between multiple counterparties,” AiX CEO Jos Evans said. “We’re automating the whole system front to back.”
December won’t be AiX’s debut. In 2018, the firm completed what it called the first AI-brokered trade between Rockwell Capital Management and TLDR Capital.
Evans says a selling point for the crypto trading community is the ability for institutions to trade anonymously.
Currently, digital market-making and trading firms require traders to connect to their systems via application programming interfaces (APIs), allowing those firms to know which positions traders have taken, Evans said.
Users interact with the AI chatbot through Telegram or Symphony and can begin trading after completing AiX’s know-your-customer requirements.
The AiX chatbot combines natural language processing and cognitive reasoning technology, Evans said.
This combination of tech gives AiX the ability to hold a conversation with customers in which the bot can clarify the customer’s intention – something that has been elusive for many AI companies until recently
“AiX can communicate with a client in a workflow versus them using a dropdown system to select trade parameters,” Evans said. “Our system can speak to them during the process, ask them questions and give them options. We can say to them, ‘This is what we got right now. Do you want to do X or Y?’”
AiX will source liquidity through a wide range of market users. Fifty crypto firms are in the onboarding process and 50 more are in the pipeline, according to Evans. The chief executive refused to name those firms until the December launch but claims they’re some of the largest names in crypto.
The tool is also compliant with the markets in financial instruments directive (MiFID), a European Union regulation that sets transparency requirements for pre- and post-trade transparency.
AiX doesn’t hold any client funds, Evans said, and Seed CX settles the trades.