Fintica AI, a fintech firm headquartered in Tel Aviv, has entered into a landmark joint venture with Hong Kong-based proprietary trader Legend Arb Financial Group to develop artificial-intelligence technology that may jump-start the development of AI trading in the Asia-Pacific securities market.
The use of AI technology has become increasingly important, particularly in highly dynamic markets that require new trading strategies to cope with rapidly evolving market demands.
“A long time ago, it was easy to make money by trading using just my hands through manual clicking. But starting three to four years ago, it has become very difficult to trade manually and still make money,” says Kace Lam, executive director and chief executive officer of Legend Arb in an interview with The Asset. “Then we developed algorithmic trading and it worked well for a while. But in recent years, I noticed the effective period for an algo trading strategy is becoming shorter and shorter.
“So, we need to keep on creating new trading strategies all the time since the market has become more and more dynamic and we don’t have sufficient resources to keep on inventing new trading strategies. That’s why I believe we can use AI because it is more flexible and faster,” Lam says.
Fintica AI’s Shirley Kwong and Legend Arb's Kace Lam.
While other securities trading companies are also thinking of tapping AI to develop new trading strategies, Lam says the concept is still at the exploratory stage. “As I understand, they are still thinking about it and talking about it but not yet doing it. We (in Asia-Pacific) don’t have a real AI-generated trading algorithm yet.”
“In the case of Fintica, they already have the AI tools that they use on unsupervised learning. Hence, it’s possible to get the data, and they can find a profitable strategy for you. In terms of trading, they use the technology for different markets,” Lam says.
Founded by Lam in 2011, Legend Arb specializes in pricing Chinese-related products, equity index futures, and commodities futures. It is a market maker for the Hong Kong Exchanges and Clearing and the Singapore Exchange. It also has offices in Shanghai, Taiwan, and Singapore.
LegendArb currently uses its own in-house-developed trading technology, but it hopes to develop more advanced AI-based trading strategies with the help of Fintica AI.
Fintica AI is a fintech company that offers advanced AI solutions for the capital markets. Its flagship platform, Spectrum MRI, delivers state-of-the-art tools for identifying market regimes across asset classes, including equities, fixed income, and commodities. Headquartered in Tel Aviv, the company maintains a strong presence in major global financial hubs, driving innovation in the financial industry.
“By offering predictive analytics and robust risk-management capabilities, Fintica AI empowers investment managers, quantitative analysts, and strategic allocation teams with cutting-edge decision support tools,” says Shirley Kwong, managing director, global head of client coverage for Asia-Pacific, at Fintica AI. “This partnership with Legend Arb represents a significant step forward in our mission to revolutionize the financial markets with advanced AI solutions.”
“By joining forces, we can harness our respective strengths, explore the untapped potential of Hong Kong and Greater China’s financial sector, and deliver transformative innovations that shape the future of quantitative investment,” Kwong adds.
Through the joint venture, Legend Arb is making a strategic investment in Fintica AI, strengthening the partnership between the two companies. The alliance seeks to empower Legend Arb to advance its quantitative trading capabilities by harnessing Fintica AI’s unique unsupervised AI technology. The partners also aim to launch innovative new products and solutions for the securities market.
Simultaneously, Fintica AI will expand its business development efforts and market presence in Hong Kong and the Greater China region.
