Northern Trust has developed a pricing engine for securities lending that utilises machine learning and advanced statistical techniques to forecast lending rates for 34 global markets.
Built on a hybrid-cloud platform, the algorithm leverages numerous strategic market data points from multiple asset classes and regions to project the demand for equities in the securities lending market.
The data is amalgamated with trader forecasts to automatically broadcast rates to clients from trading desks in Chicago, London, Hong Kong, Sydney and Toronto.
“With this latest advancement, we have created an infrastructure and analytical framework that can intelligently adapt to changing market conditions” says Dane Fannin, head of global securities lending at Northern Trust. “Our technology assesses market demand across thousands of securities and allows our traders to extract better returns for our clients. The potential benefits from machine learning techniques extend beyond this initial application, and we will continue exploring and developing solutions that drive value for our clients.”
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