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Kristina Fan

Integrating AI into the fabric of Wall Street

03 October 2018

In the latest in our Gamechangers series profiling start-ups that have graduated from the Barclays Accelerator – powered by Techstars programme, we talk to Kristina Fan, Founder and CEO of 7 Chord, a capital markets technology firm that empowers bond traders with predictive pricing and trading signals. She tells us about using AI to help banks and asset managers monetise their proprietary data, and building a firm with diversity in its DNA.

7 Chord is… a capital markets technology firm that offers predictive pricing and trading signals to bond traders. Our proprietary AI engine, BondDroid, is essentially an “algorithm-in-a-box”. BondDroid widgets can be combined in a Lego-like fashion to automate various trading and portfolio construction tasks. Essentially, we are integrating AI into the fabric of Wall Street, making sure that it plays nice with the existing ecosystem of legacy software and humans.

We’re different to our competitors because… we are the only firm in the market that actually hands you the toolkit generating our predictive pricing and signals. This gives our clients an option to tweak the assumptions and leverage their proprietary data without it ever leaving their firewall. Dealers and asset managers have all this valuable data but they don’t have the tools to turn it into actionable insights, so it goes to waste. In addition, making your internal data AI-ready gets our clients one step closer – at least technologically – to monetising it in other ways. I think we are very far from the day when market participants start selling their data to each other, but this day will come.

Dealers and asset managers have all this valuable data but they don’t have the tools to turn it into actionable insights, so it goes to waste.

We decided to join the Accelerator… to battle-test our AI engine with a sophisticated global institution. Many technology start-ups underestimate the amount of effort it requires to move from beta to an institutional quality product. Our clients expect our toolkit to be scalable, reliable, secure and deployable in practice. We were very lucky to have Barclays as a beta client and their feedback has been invaluable. This summer we have launched BondDroid 2.0 more broadly and it was a relatively smooth process because of what we have learned in the proof-of-concept stage.

Since the accelerator Demo Day … we have been laser focused on scaling our business. To us this meant making BondDroid “enterprise ready” and getting it in the hands of as many traders, portfolio and risk managers as possible. We are truly grateful to all of our customers for having the foresight to integrate the trading tools of the future. They are the true agents of change.

Chord

“Today’s start-ups are tomorrow’s corporate America. We have a responsibility to build the firm with diversity DNA in its governance process and culture from the very beginning.”

One of the things I’m excited about… is Barclays’ Women On Boards programme, which sits within the bank’s Win gender network. There’s a lot of talk about how to involve women in governance, but not a lot of practical solutions. We face a pipeline problem – there aren’t enough women with the corporate governance experience and you can’t just join a board of a major corporation without it. So, you have to start somewhere. An advisory board role at a fintech start-up is a great place to start.

Today’s start-ups are tomorrow’s corporate America. We have a responsibility to build the firm with diversity DNA in our governance process and culture from the very beginning. Diversity has a lot more dimensions than gender or ethnicity. For example, we have three generations of developers – baby boomers, generation Xers and millennials – all working on the same problem, and they all bring their different perspectives into the mix.

My advice to companies entering the Accelerator programme … is to take advantage of the Techstars and RISE network to get as much feedback on your product and positioning as possible. Also, expect that you may not be able to raise a seed straight away, so you need to have a plan for bridge funding.