Rainbird and AI-X partner to transform the Inter-Dealer Brokerage market

Wednesday 6 September 2017

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The alliance sets out to reduce Inter-Dealer Brokerage commission (by 50-95%), and provide an audited simpler, safer and fairer way to trade.

LONDON 5 September 2017: We are delighted to announce that Rainbird and AI Exchange (AI-X) have joined forces to build a new system that will transform the Inter-Dealer Brokerage (IDB) market.

IDBs allow large-volume traders to transact privately. This billion-dollar market is outdated and no longer fit for purpose: the services are notoriously slow, unreliable and expensive.

But the alternatives are limited. The trader is left with the time-consuming option of selling stocks in discrete chunks, or the risky option of using a ‘dark pool’ – a method of keeping a transaction private until it is completed, but without the guarantee of discretion.

Rainbird and AI-X are set to change this, with a new system that is interfaced by a sophisticated AI-powered chatbot, which will link to real-time data and be accessible either by instant messaging or voice commands. We will use state-of-the-art blockchain and cognitive reasoning technology to record financial market transactions and enable more efficient trade confirmations. This solution – a world first – will offer superior service at a lower price.

James Duez, executive chairman at Rainbird, explained: “Most people not involved in financial markets assume that all transactions take place on trading platforms, with little or no human interaction – but intermediaries are used for discretion and to avoid the purpose-built algorithms used by High-Frequency Trading (HFT) companies that look to take advantage of high-volume activity.  Rainbird is an ideal platform to build this solution on because it can actually reason; applying human expertise, data and operating rules to form rapid, accurate judgements. Our authoring platform will be used to build models that can replicate the way IDBs operate, pulling in real-time data to augment chat interactions. Rainbird can handle complex decision-making at scale and provide an audit trail for every decision made – ensuring transparency and compliance.”

In reaction to the new partnership, Jos Evans, founder & CEO at AI-X said: “Our business case couldn’t be stronger, not just because of the logic, talent and technology behind it, but also because of the sheer scale and certainty offered by the market we plan to enter and transform. Our forecasting predicts that we will be able to attract approximately 75% of IDB revenues, while simultaneously reducing commissions by more than 50%.”

AI-X with Rainbird will be able to autonomously receive price requests from clients, request prices from other traders and aggregate pricing in real-time. Clients will benefit from a cheaper, faster service, brokers will be able to build greater trust, and the public will benefit from increased efficiency in the market, lowering transaction costs for all.