FNG Exclusive Interview… It has been about six months since AI-based sentiment trading fintech company Acuity Trading completed its first acquisition, of Signal Centre. We thought it would be a good opportunity to catch up with Acuity CEO Andrew Lane, and find out more about how the integration as gone, as well as get his thoughts on the changes swirling around the online trading sector.
FNG: Hi Andrew, and thanks for joining us today. It has been almost half a year since you completed Acuity’s first acquisition, of Signal Centre. How did that agreement come about? And, how have the past few months gone as far as integration with Acuity?
Andrew: It’s my pleasure, thanks for having me.
Our agreement with Signal Centre came about by what I like to call a “planned coincidence”. It’s an oxymoron in its truest sense but by this I mean that when we started Acuity, our long term vision was to create a service that brought together the various disparate content sets within the trading sector. Not just in terms of the visuals, which is one of our core USP’s, but in helping traders to make sense of the data too whether that is by incorporating the various data sets together or going a step further and using NLP to analyse the data to extract insights that are obscured to the naked eye.
So when a mutual client introduced us to Signal Centre it really was a planned coincidence and I’m pleased to say it was a very happy one too since it was apparent from the outset that the product, the team and our shared vision was highly compatible. It has been a huge success both commercially but also personally. It’s had a positive effect on our client relationships, particularly when it comes to compliance since Signal Centre is authorised and regulated by the FCA. This sets them apart from many signal providers out there and it’s something clients are looking for.
The pandemic has meant that we have had lots of time to focus on product integration too and we have already started work on new products which will be coming to market soon. The one thing we are looking forward to though is getting the whole team together since we’ve not all met in person yet. It will be a moment for celebration when we do.
FNG: Your decision to open an R&D operation, Acuity Analytics, in Spain as a partnership with academia (UPC) seems interesting and somewhat unique, at least in the online trading world. How did you decide to go that route?
Andrew: During my previous employment I was fortunate enough to relocate to Spain and my desire to remain here was one of the driving factors in starting Acuity. And it was during Acuity’s formative years that I attended various meet up events in Barcelona which had a burgeoning reputation for technology. Visiting NLP practitioners from the USA were speaking about advances in NLP technology and I was keen to establish some contacts.
It was at one of these events that I made the acquaintance of Professor Argimiro Arratia, Associate Professor of Computer Science at the Polytechnic University of Catalonia. He was keen to highlight to me that the skills his US counterpart spoke so highly of were available here in Barcelona and that the USA were not the only pioneers in NLP technology. So it was from then that we established a relationship with UPC in Barcelona with Professor Arratia at the helm.
We felt it was an important relationship to have both from a product development perspective to ensure that we stay at the very forefront of the technological arms race but also as a means to add credibility to our data. News sentiment still is a relatively new concept for many in the online trading world so academic credibility brings another angle that helps our commercial activities.
FNG: The past year has seen record numbers of new, and ever younger clients join the ranks of active traders at online brokerages. How does your core competency of trading signals and news sentiment data analytics fit into that?
Andrew: Whilst the online trading sector has enjoyed a huge boom during the pandemic, the volume of younger and novice traders entering the market is a huge challenge for brokers. These generation traders have a “get rich quick” mindset having witnessed some unusual market scenarios with cryptocurrencies and Wall Street bets. Brokers need to find a way to satisfy their appetite for early success whilst ensuring that they adhere to compliance regulation and maintain their interest for the long term.
However, one of the objectives in starting Acuity, well before the pandemic, was to help traders make more informed decisions by harnessing the power of news content on a global scale using AI technology to understand how the market is “feeling” at any one time and how it is likely to move as a result.
Signal Centre shares this objective and reinforces it but in different ways. The signals published are fewer than their competitors but this is intentional so as not to confuse traders. They are designed to be clear and transparent so that traders can learn the strategies behind the trade ideas and help them become more educated traders in the long term. Plus, because Signal Centre is authorised and regulated by the FCA, it means that both brokers and traders have peace of mind when it comes to the quality of the analysis behind the signals and that we operate in a compliant-friendly way.
FNG: From your perspective, what changes have you seen come about in the FX and CFDs brokerage world the past year or so during the COVID era? What further changes do you think are coming?
Andrew: Reflecting on the last year it’s quite interesting to see just how much has changed when on the surface it may appear that little has.
Undeniably the biggest change has been the growth in new traders and increased market volatility. This has had a knock on effect on trading volumes and therefore greater spending ability by brokers for third party services such as Acuity and Signal Centre. Brokers are actively seeking services and being more adventurous when it comes to trying new things such as a much greater move towards Equity CFDs and multi asset tools. For example, we are seeing an uptick in demand for our corporate calendar, not just the traditional economic calendar. This convergence of the vanilla equity and CFD world is certainly a trend we are seeing across the market.
As we look ahead, I sense the market volatility will ease back as central banks start tapering their financial stimulus packages but retail investors will continue to retain relatively higher savings due to ongoing travel restrictions and therefore their appetite to invest we anticipate will remain.
FNG: What else can we expect to hear from Acuity in the coming months?
Andrew: One of the greatest things about being a scale-up is that we can pivot and take advantage of new opportunities as they happen so there are always going to be things that come up that even we can’t predict right now. That’s what makes this journey exciting.
That said, we do have a full pipeline of product development happening. Our academic studies are pushing the boundaries in terms of new data sets and we are working at enhancing the client experience across a number of areas. Plus our team is expanding rapidly. We will see at least three new employees join us in early autumn and a return to our London office too. We really are looking forward to getting together as a team and reuniting with our colleagues and partners.