The survey of 300 financial crime decision makers working in the financial services sector in the UK, also found that on average, organisations spent £53 annually on financial crime defence for each customer relationship they have. Moreover, they refused an average of £90,240.77 and exited an average of £90,869.52 worth of UK customer relationships for financial crime reasons during the last 12 months.

Andrew Jacobs, head of regulatory consulting at DWF, said: "Responses to the survey indicated that firms with a revenue of around £10m per year are likely to spend in the region of 1.72% of total revenue on financial crime prevention and deterrence. Larger firms are typically spending less than 1% of total revenue to fight financial crime, particularly those with l revenue of £50m or greater. As a cross-section of the Financial Services sector, this tells us that proportionately, smaller firms are spending a greater share of their turnover on financial crime prevention.

"Conversely, firms with greater revenue (£10M plus) are clearly spending most of their financial crime spend on human resources, with over 32% of annual spend being on Financial Crime roles, compared to those firms with a turnover up to £500,000 for whom Financial Crime roles never exceeds 27% of total annual  financial crime  prevention spend. This figure and our wider analysis shows us that Human Resources continue to be one of the most effective ways of detecting human behaviour linked to Financial Crime activity.

"In a climate where businesses are being held to account on their Environmental, Social and Governance approach by investors, clients, employees and society more broadly, it is important for financial services business to make sure that they are considering evolving parameters, so that governance is robust and their control framework remains alive to new risks."

The financial crime decision makers cited that employee resources in financial crime roles cost their firms an average of £180,000 per year. At the end of their respective reporting periods, respondents said there were an average of nine full-time employed UK staff within their firm performing financial crime roles, spending an average of 46 hours of employee time per week monitoring transaction alerts and reviewing screening alerts. Analysis also showed that every additional 10 hours spent weekly on monitoring transactions and reviewing alerts, result in an additional 1.5 Suspicious Activity Reports (SARs) raised internally.

Technology is key to increasing financial crime detection and prevention – but it is also a significant factor in driving up costs and staff workload. Respondents highlighted that over the last 12 months, £76,000 was spent on financial crime prevention technology, per firm. They also stated that they expect their firms will spend around £800,000 on crime prevention technology in the next five years.  Technology usage is widespread – with 82% of firms using an automated system to screen clients and 84% employing transaction-monitoring software for Anti-Money laundering (AML) and sanctions detection.

"Just as dedicating more staff to financial crime boosts results, so too does the use of technology. However, our analysis has found that this technology usage does not necessarily improve efficiency. In fact, organisations that use automated systems spend more time reviewing alerts – for every 1,000 customer relationships, they will spend around an additional 49 hours per week monitoring transactions and reviewing screening alerts compared to firms that don’t utilise automation. The statistics tell us that because technology generates more alerts and highlights more potential risks, it also requires more time on follow-up investigatory work, but exactly how much is created is dependent on whether firms have correctly calibrated their systems. There is the real danger that poorly aligned alert systems simply create a cottage industry within a firm," said Jacobs.

Bev Robertson, Chief Operating Officer of Association of Professional Compliance Consultants, added: "This research provides a great snapshot into the deployment and engagement of firms.  It not only highlights the costs and resources involved, but also looks at the challenges of balancing elements such as the use of technology versus manual screening in identifying and subsequently reporting on suspected financial crime – it highlights the variances across sectors and indeed around the global world of financial services. It also provides some thought-provoking ‘not to be ignored’ takeaways that firms should definitely be considering when evaluating their own financial crime prevention programs."

Hedge fund managers come in many ways - Some make decisions with their gut and some with mathematical data. Either way, there are many succeeding at that. But you know, there’s a reason the most successful investors who have relied on their gut instinct are stars - it’s damn hard to do.

At face value, it seems better for an investor to rely on sourced data than gut instinct. At least with data, you can try to predict the future using signals from the present, but relying on gut instinct in that case is not easy. In fact, the world’s best-known performing hedge fund, Renaissance Technologies, is known to rely majorly on computerized trading using quantitative models derived from mathematical and statistical analysis of real-world situations - just a very successful example.

Algo Trading (What, Why, and For)

To start, Algorithmic trading is a method of executing market orders using automated, pre-programmed instructions. It's the use of computer codes and chart analysis to buy or sell assets according to set parameters such as volatility conditions and price movements at a given time.

The rise of algo trading can be traced to human curiosity, this time the curiosity of hedge fund and asset managers to optimize for profitable trading strategies without the need for constant human attention. With pre-programmed strategies, bots can be trained to buy or sell assets at unique market signals (e.g high volatility of stocks, Dow closing 500 below its 20-day moving average) without having a human wait all-days long for those signals.

Algo trading makes use of complex formulas, combined with mathematical models and then some human oversight to make trading decisions. It's such that algo traders often make use of high-frequency trading tech, capable of making tens of thousands of trades per second, far beyond what a human can handle. The benefits of algo trading can include:

• Trades executed at the best possible prices

• Reduced risk of manual errors when making trades

• Backtesting for viability using available historical and real-time data

• Reduced transaction costs

Problems of Algo Trading

While these benefits make algo trading attractive, it’s not something that’s easy to implement, given there are many hurdles to cross trying so. Such hurdles include the lack of required computing resources, lack of programming and technical expertise, lack of access to testing data e.t.c. These hurdles make firms shy away from algo trading, but it’s not all that bleak; there are workarounds and solutions to these hurdles.

One such workaround and solution to setting up algo trading operations is tapping into the resources, talent and technical expertise of others rather than building yours from scratch. For example, you can access computing resources on the cloud on an on-demand basis instead of buying your own servers; you can make use of mathematical techniques and algorithms created by others instead of programming yours from scratch.

Usually, setting up your own trading bots is a difficult and daunting task.  It requires major expertise in quantitative disciplines and then hard work to put this quantitative expertise to use in trying to model and predict the markets, hard work including many trials and errors. If you’re willing and able to put in that hefty work to do so, fine, but if you’re not, there are some software solutions for that, such as one we’ll suggest to you.

Solutions

What we’re suggesting is a software suite where there’s access to a vast network of algorithmic trading bots harnessing the technical and mathematical knowledge and expertise of others. For example, MetaTrader 5 platform for hedge funds presents 13 000 ready-made solutions & robots. With these bots, you can choose and tweak your trading strategies while staying in tune with validated investment strategies put together by a network of global investors.

As a hedge fund trader, it’ll be optimal for you to make use of trading bots and automated strategies built by others instead of creating yours from scratch, especially when you have limited resources to do so.

As to computing resources, there are also online solutions where you can connect to servers hosted online to handle your trading operations. In this case, MetaTrader 5 also comes in handy, with direct access to this website called MQL5, a unique and very valuable property in its right. MQL5 is an online hub of distinct groups where traders get access to distributed computing resources on the cloud to test and analyze their trading strategies on real-time or historic data. You know, with cloud computing, it’s easier and faster for you to deploy your algo models and tests.

Distributed computing resources are very important for traders building and testing algorithmic trading systems and strategies. It’s easier to build stronger systems when you can train it on a vast amount of data available and accessible via the net, i.e. “cloud”.

With direct access to the MQL5 cloud computing network, hedge fund traders can easily test and judge the performance of their trading strategies without risking any loss in the process.

These kinds of features make it easy for traders to adopt sound algorithmic strategies and are one that should excite any hedge fund trader.

Conclusion

Algo trading is a validated strategy for hedge fund traders, ranging from small ones in the million-dollar range all the way to the big ones we know of. It provides a level-playing field for both the big investor and the small one alike.

With state-of-the-art tools around, you can be put in the best position to implement algo trading as your strategy. After that, the rest is up to you, at least the best effort you put in. But, to note, you’ll be in competition with many other algo traders globally so you have to work with that in mind.

New referral programme rewards users and new customers with Bitcoin SV cryptocurrency

Zumo, the Scottish crypto app, has announced the return of its popular Refer and Share programme designed to help people get comfortable with crypto. 

The first Refer and Share campaign launched in October 2020 and brought 20,000 new users into crypto through the Zumo app, offering a simple and low-barrier way for new participants to enter the crypto space. 

Now, with the UK finally opening up after long months of lockdown, the Edinburgh-based company has launched a new giveaway that will reward users with a summer pint’s worth of Bitcoin SV (BSV) each time they refer a friend. In total, Zumo will give away around £100k worth of BSV over the coming months. 

There’s no limit on the number of people Zumo users can refer; every sixth referral will attract an extra BSV bonus, and the top crypto champions will be placed on the Zumo Refer and Share Leaderboard where they can compete for additional BSV rewards. 

Amelie Arras, Zumo Marketing Director, said: “We’re extremely proud to be relaunching this popular giveaway with a bigger and better reward. 

We passionately believe that crypto is for everyone; this is our way of offering people a super simple way to get comfortable with crypto without needing to put up any of their own money. 

With Scottish summer in full swing, we’re saying to people: why not share Zumo with friends to earn yourself some smart money - and who knows, maybe fund a few of those post-lockdown drinks!"

Partnership will drive delivery of AccessFintech’s data and workflow solution

Capco, the global technology and management consultancy, and AccessFintech, the leading fintech company evolving the financial industry operating model through collaborative workflow, today announced a partnership that brings together AccessFintech’s data management and workflow solution with Capco’s proven delivery and engineering expertise in the financial services space.

As they address new regulations and heightened competition, banks, brokers, custodians and buy side firms remain focused on delivering efficiency improvements and enhancing their technology platforms. However, fragmented or partial data and cumbersome manual processes arising from legacy systems mean increased costs and liquidity risk. At the same time, firms are also increasingly looking to modernise their internal processes and systems.

By allowing for faster workflow adoption and change management via joint engineering solutions, this new partnership will support firms in addressing challenges around operations and regulatory compliance, including areas such as the incoming CSDR regime, IBOR reconciliation, pre-matching and settlements, and cash payment affirmations.

AccessFintech’s Synergy Network extends and enriches data, synchronizes workflow and enables technology-driven operations transformation, providing innovative and efficient transaction lifecycle management and benchmarking insights across the entire financial ecosystem. Capco’s experience in delivering transformation projects will accelerate the pace at which clients can integrate their operations with the Synergy Network to benefit from the additional transparency and certainty it offers.

Owen Jelf, Partner & Global Head of Capital Markets at Capco, said: “Whether for regulatory, risk, efficiency or cost purposes, financial institutions are actively pursuing global transformation journeys to achieve overall process simplification and a streamlining of their technology ecosystems. By bridging the gap between legacy and modern systems, innovative solutions such as the Synergy Network accelerate those journeys and deliver cost effective and highly controlled rules-based process environments.”

AccessFintech’s EVP Business Development Boaz Zilberman said: “AccessFintech is already working with a critical mass of significant financial institutions and is successfully processing more than a billion transactions a month. Coupling Capco’s industry benchmark technology and operations change management and delivery expertise with our Synergy Network and platform is an important accelerator of our clients’ operation and technology transformation.”

This week, outlets reported on Amazon’s new job posting for a Digital Currency and Blockchain Product Lead. The position will be focused on product strategy, though an Amazon spokesperson intimated that the company could be looking at beginning to accept payments utilizing blockchain-based technologies.

This marks a shift from 2017 when then-Amazon Web Services CEO Andy Jassy said, “We don't yet see a lot of practical use cases for blockchain that are much broader than using a distributed ledger. We don't build technology because we think the technology is cool, we only build it if we think we can solve a customer problem and building that service is the best way to solve it."

“My, how four years can change things. In the scheme of things, four years is a short amount of time, but in the technological world, it is an eternity. This posting is a clear indication that the blockchain community has been right all along. This is a technology which is truly transformative --- and one which is here to stay,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

"Responding to questions about the position, an Amazon spokesperson said in a statement, “We’re inspired by the innovation happening in the cryptocurrency space and are exploring what this could look like on Amazon. We believe the future will be built on new technologies that enable modern, fast, and inexpensive payments, and hope to bring that future to Amazon customers as soon as possible.”

“That last line. That’s actually even more telling that the newly created position. What it hints at is that the company is beginning to look at how it will accept blockchain-based payments. Whether that means that the company is looking at the potential of accepting Bitcoin or cryptocurrencies isn’t explicitly stated, but I think it can be assumed that leadership sees that CBDCs, digital currencies developed by central banks, are most certainly going to transform the way the world accepts payments. Amazon is no exception,” noted Gardner.

The job description itself notes that “[y]ou will leverage your domain expertise in Blockchain, Distributed Ledger, Central Bank Digital Currencies and Cryptocurrency to develop the case for the capabilities which should be developed, drive overall vision and product strategy, and gain leadership buy-in and investment for new capabilities.”

“What we’re seeing is that multinational companies are already scrambling to make sure that their technology stack is suited for the digital transformation that’s underway. Particularly with China being bullish on the e-yuan, I think they understand that, no matter what, a very large consumer block will very soon be participating, en masse, in blockchain-based payments. Once China is officially in, it’s only a matter of time until you see other superpowers release their own CBDCs,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“This is a process that will continue to play out over the next few years,” said Gardner. “I consider it this generation’s Race to Space. You’re already seeing countries jockeying for position. Who will be the first superpower, who will be the first regional player? There is room for a handful of winners in this race for a CBDC. Forward-thinking countries already see the implications,” opined Gardner.

Plato Technologies Inc., the provider of the industry-leading blockchain intelligence platform Plato, has partnered with Blockleaders.io, the leading crypto and blockchain news and interview platform, to offer quality updates and blockchain focused data across both platforms.

Marketing expert Lisa Gibbons, associate with Blockleaders.io says the partnership with Plato Technologies will allow the news platform to extract the most up to date crypto and blockchain intelligence to leverage the data in real-time and give readers access to the latest industry insights.

Blockleaders is a crypto focused interview and news platform, founded in 2018, that has featured some of the most exciting leaders in crypto and blockchain including the late John McAfee, Andreas Antonopolous, President Vit Jedlicka, Stefan Rust, Richard Ells, Joel Comm, Samson Williams, Mru Patel and Pete wood.

Jillian Godsil, co-founder and editor in chief of Blockleaders, says: "Plato and Bryan are both forces of nature - it is a pleasure to work with such committed people and platforms. Plato is all about sharing data and Blockleaders is about creating it - a marriage made in crypto."

Plato is an open intelligence repository and data platform that unlocks the power of Vertical Search in a highly scalable and immersive way. This global platform operates in 23 languages and is built around advanced automation to help all Plato users extract faster insights.

Bryan Feinberg, CEO of Plato Technologies Inc., says: "We are really excited with what this partnership brings. It's a great example of how community convergence is helping drive and support adoption of our product and tech. So much of our lives today are data dependent that we often find ourselves disconnected from the pulse that is driving our respective sectors and is at the core of our distributed approach towards data and data intelligence. Our beta testing is supporting those assumptions as we will be surpassing our 4,000,000th organic Visitor this month since launching the Open beta @ zephyrnet.com in April of 2020."

Commenting on contrasting US Manufacturing and Services PMI data, Caleb Thibodeau, Associate at Validus Risk Management, said: “Having stalled at index all-time highs in June, this US Manufacturing PMI release marks a new index high as industry supply chain bottlenecks are resolved, such as chip shortages for automakers, and as the labour market continues to return to capacity. At the same time, while the service industry had been roaring back in the second quarter, the disappointing US Services PMI release today reflects what markets have been starting to show this week: that new COVID-19 variants pose a material risk to national re-opening efforts going forward.
“Along with new variant-related risks, Services will also have to manage additional pressures going forward: namely, wage and price inflation. Enticing consumers at a higher price tag while balancing increasing labour shortages may translate into lost revenue and higher labour costs.
“Overall, PMI as a leading indicator has spoken up with this release: factories and industry are back in full force but further progress on the pandemic is required before the next step in the recovery for services. Today’s PMI print bodes well for the Federal Reserve to continue toeing the ‘cautious’ line. It’s clear that supply chains and new orders are well on their way as the economic recovery progresses, but the pandemic and labour market conditions continue to threaten hospitality and entertainment in many states.”