On June 18, 2014, Dr. Khaldoun Khashanah, professor and director of the financial engineering division at the School of Systems & Enterprises (SSE) was part of an expert panel discussion on ACTUS: Algorithmic Contract Type Unified Standards, at the Securities Industry and Financial Markets Association (SIFMA) Tech 2014.
The two-day event which was hosted in New York City, the financial capital of the world gathered industry participants, regulators and solution providers to discuss the evolving role of technology in financial services, its impact on the industry and how to maximize the potential of innovation while managing risk.
“SIFMA Tech is a great platform for financial technology experts and industry leaders to share perspectives on a range of significant technological and operational changes, including cyber security considerations and measures, shortening the settlement cycle and social media,” said Khashanah.
Post the economic crisis, standardization has become an essential need in the financial sector and in an effort to enable more transparency and efficient business processes there is a great push to develop unified standards across the financial universe.
“At Stevens, we look at building solutions from a technological and a systems perspective – an example is our work on developing the ACTUS project, a financial instrument reference database that represents virtually all financial contracts as algorithms that link changes in risk factors (market risk, credit risk, behavior) to cash flow obligations of financial contracts,” said Khashanah.
As the financial industry evolves to deal with increasing regulatory pressure, new technology and new competition, the standards and processes on which it depends need to evolve too. “As a reference database, ACTUS will be the technological core of a future open source community that will maintain and evolve standardized financial contract representations for the use of regulators, risk managers and researchers."
Khashanah is a leading member of the ACTUS research project hosted at the Financial Systems Center at Stevens, a state-of-the-art financial research and teaching facility that supports programs at the undergraduate, master’s and doctoral levels in financial engineering.
Khashanah has been conducting in-depth research in stochastic systems dynamics and modeling, high-frequency finance and algorithmic trading, and systemic risk – areas that are intrinsic in the structuring of financial products and markets.
“We are confident, that with ACTUS institutions can rapidly respond to the changing regulatory and market environment, and can monitor systemic risk and enterprise risk management. This will contribute to more safer and efficient financial markets and significantly reduce the cost and burden of regulation," said Khashanah.
The discussion on ACTUS was very well attended and received at the event. “The goal is to design systems solutions that can help financial centers make better decisions and solve analytical problems – this can be achieved through continuing advances in technology, which will allow the financial services industry to deploy increasingly sophisticated, forward-looking analytics to help the markets."
Established in 1912, SIFMA, a leading financial industry trade group brings together the shared interests of hundreds of securities firms, banks and asset management companies.
SIFMA Tech, SIFMA's technology arm attracts leaders from industry and academia who convene to discuss the evolving role of technology in financial services and the importance of public and private sector collaboration to ensure that the right policies and technologies are in place to maintain a resilient marketplace.